(SEC)

10.5 - Notice of Penalty Waiver Policy  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  Notice of the penalty waiver policy shall be included in every notice of the intent to impose a penalty.  Such notice must include a statement instructing the provider or supplier how to perfect a penalty waiver request, including the deadline for doing so (which should be congruent with the process for imposing the penalty at issue).  In addition, such notice must include either a full statement of the conditions that must be met for a penalty waiver to be granted or the URL of a Web page where the policies of this section may be reviewed.   In the case of a penalty imposed before the implementation date of this policy, an affected p rovider or supplier will be afforded the opportunity to request a penalty waiver up to 120 days after such implementation date.  As such, an affected provider or supplier has until May 19, 2006, to file a request for a penalty waiver to the appropriate Med icare contractor.  Specific notice to an affected provider or supplier of the policies of this section and the extended deadline for filing a waiver request is not required unless the Medicare contractor is actively communicating with such provider or supplier concerning a penalty imposed before the implementation date of this section.   10.6 - Request for a Penalty Waiver Determination  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  A provider or supplier must request a 903(c) penalty waiver determination (but should not file such a request before receiving a notice of an intent to impose a penalty).  If the provider elects to request a penalty waiver determination, the provider or supplier must do so by the deadline specified i n the notice referenced in 10.5 or, if applicable, by the deadline specified in the second paragraph of 10.5.  Although a penalty waiver determination must customarily be requested by the affected provider or supplier, the contractor having jurisdiction over the matter (see 10.7 below) may initiate such a determination on equitable grounds or for other good cause.   10.7 - Jurisdiction  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  Jurisdiction to make 903(c) penalty waiver determination has two aspects.  The first aspect is jurisdiction to determine whether the guidance was erroneous.  The second aspect is jurisdiction to complete the penalty waiver determination.   10.7.1 - Jurisdiction Regarding Error (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The entity that issued the guidance in question has jurisdiction to determine if the guidance was erroneous unless such jurisdiction is delegated to another entity. A contractor that receives a request  to make a 903(c) penalty waiver determination with respect to guidance that it did not issue (and for which error jurisdiction has not been delegated) shall refer the request to the issuing entity through its regional office (RO) or project officer unles s the contractor retains jurisdiction to complete the penalty waiver determination in accordance with 10.7.2, below.  In the latter circumstance, such referral shall be made only to secure a determination regarding whether the guidance was erroneous.   An entity that has jurisdiction to determine error but lacks jurisdiction to complete the determination will make such error determination and then refer that finding to the entity that has jurisdiction to complete the penalty waiver determination.   10.7.2 - Jurisdiction to Complete the Penalty Waiver Determination  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The entity with the authority to impose the penalty that is the subject of the provider or suppliers request for a 903( c) penalty waiver determination has the jurisdiction to complete such determination (regardless of whether it has jurisdiction to determine if the guidance was erroneous).  If the contractor does not possess such authority, then it does not have jurisdicti on to complete the 903(c) penalty waiver determination unless a specific delegation of authority is issued to the contractor by the contractors project officer or other competent CMS authority, which authorizes the contractor to complete such determinati on.  Absent such delegation, the contractor must refer the provider or suppliers request to the entity that possesses such authority.   See 10.3 regarding whether a matter is properly considered a 903(c) penalty under this section.  See also 10.4 regarding whether the matter has been delegated to the contractor.  If the matter raised by the provider or supplier is outside the scope of matters discussed in the foregoing specified subsections, then the contractor to which a 903(c) request has been made wi ll decline jurisdiction absent a specific grant of jurisdiction on such matter and will refer the matter to the contractors RO or project officer, as appropriate.   10.8 - Determining Whether the Guidance Was Erroneous (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  Consideration as to whether the guidance at issue was erroneous is based on the standards specified in 10.2.1.  If the guidance is determined to have been not erroneous under those standards, and if the contractor a lso has jurisdiction to complete the penalty waiver determination, then no further determinations will be made regarding the conditions specified in 10.2 but, rather, notice will be given to the provider or supplier of an adverse penalty waiver determinat ion and the case will be closed.   If the guidance is determined to have been not erroneous, but the contractor does not also have jurisdiction to complete the penalty waiver determination, the case will be referred to the entity that has such jurisdiction (through the RO or project officer if necessary or appropriate) with the information the guidance was not erroneous.  If the guidance is determined to have been erroneous and if the contractor also has jurisdiction to complete the penalty waiver determinat ion, then the contractor shall complete such determination in accordance with the procedures specified in 10.9.  If the guidance is determined to have been erroneous but the contractor does not have jurisdiction to complete the penalty waiver determinatio n, then the contractor shall advise the entity having such jurisdiction (through the RO or project officer if necessary or appropriate) that the guidance was erroneous, furnishing such additional information as will facilitate the completion of the penalty  waiver determination.   10.9 - Completing the Penalty Waiver Determination  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The process of completing the penalty waiver determination includes consideration of four threshold matters, i.e., the timeliness of the request, ripeness, the sufficiency of information furnished by the provider or supplier, and mootness.  If adjudication of the matter is not barred by any of the foregoing matters, then the remaining required conditions specified in 10.2.2 through 10.2.8 are considered.  10.9.1 - Timeliness of Request  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The contractor shall decline to make a penalty waiver determination on a particular matter if the provider or supplier did not timely request such a determination in accordance with  10.6.  However, even if the provider or supplier did not timely r equest such determination, the contractor should, nevertheless, make a penalty waiver determination on equitable grounds or for other good cause.   10.9.2 - Ripeness  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The contractor  shall decline to make a penalty waiver determination on a particular matter if the contractor has not given notice to the requesting provider or supplier of the intent to impose a penalty or has rescinded such notice pending further consideration of the m atter.   However, a contractor should make a penalty waiver determination even if the contractor has not given notice to the provider or supplier of the intent to impose a penalty or even if the provider or supplier has not requested a penalty waiver determ ination, provided the contractor determines that making such determination will likely promote administrative efficiency in the particular circumstance or for other good cause.   10.9.3 - Sufficient Information (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The provider or supplier has the burden of proof and of production of evidence to show that a 903(c) penalty waiver should be granted in the particular circumstance.  However, the contractor should take notice of any relevant and material fact that is not subject to reasonable dispute.   The contractor shall make a preliminary evaluation regarding whether the provider or supplier has submitted sufficient information to permit the contractor to determine whether all of the rema ining seven conditions specified in 10.2 have been met.  If the provider or suppliers request does not furnish sufficient information to make a determination on each such condition, the contractor shall advise the provider or supplier of all deficiencies and allow 45 days for the information to be supplied.  If sufficient information is not supplied within the allotted period, the contractor shall close the penalty waiver case and proceed with its normal process for considering whether the penalty should be imposed.  However, the contractor may at its sole discretion, grant an extension of time to supply information.  10.9.4 - Mootness  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  If, at any stage of the penalty waiver determination process, the contractor intending to impose the penalty determines that the penalty will not be imposed on a basis other than 903(c), the contractor shall consider the penalty waiver issue to be moot and shall close the case.   10.9.5 - Required Conditions Other Than Error (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  If the guidance has been determined to be erroneous, and if adjudication of the matter is not barred by issues of the timeliness of the reque st, of ripeness, of sufficiency of information, or of mootness, then the contractor shall complete a penalty waiver determination by making separate determinations on each of the remaining required conditions specified in 10.2.2 through 10.2.8.  The cont ractor shall make findings on each such condition, notwithstanding that a particular condition was not met.   10.9.6 - Completing the Determination  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The contractor shall complete th e 903(c) determination within either: a) 60 days of a provider or suppliers direct request for such a determination if the contractor has jurisdiction to determine both error and all other conditions or b) 45 days of receiving an error -only determination  from another entity.   However, delays caused by a provider or suppliers failure to furnish sufficient information, by the failure of another contractor or CMS component to make a proper and timely referral of a matter, or by the failure of CMS to timely clarify proper jurisdiction in a particular matter, are not included within this timeframe.   If the contractor cannot complete the determination within the applicable deadline, then the contractor shall furnish notice of such delay to the provider or suppl ier, shall take no action to impose the penalty at issue, and shall seek to resolve the issues causing the delay.  If the contractor determines that all of the conditions specified in 10.2 have been met, then the contractor shall approve the provider or s uppliers request for a penalty waiver and shall not impose, or shall rescind, the penalty at issue.   If the contractor determines that any condition among those specified in 10.2 has not been met, then the contractor shall deny the provider or suppliers  request for a penalty waiver and shall thereafter consider the penalty at issue solely under the terms of the authority for imposing such penalty or under such other authority as may be applicable in the circumstance.   10.10 - Notice of the Penalty Waiver  Determination  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The contractor shall furnish notice to the provider or supplier of the contractors penalty waiver determination.