(SEC)

Medicare Claims Processing Manual  Chapter 33  Miscellaneous Hold Harmless Provisions   Table of Contents  (Rev. 739, 11- 01-05)  Transmittals for Chapter 33  1 - Overview  10 - Erroneous Program Guidance: Basis to Waive Penalty  10.1 -  Policy  10.2 -  Basic Conditions That Must Be Met To Waive Penalty  10.2.1 -  Guidance Was Erroneous  10.2.2 -  Guidance Issued by the Secretary or Contractor  10.2.2.1 -  Contractor Acted Within Scope of Authority  10.2.3 -  Guidance Was in Writing  10.2.4 -  Guidance Related to Item, Service, or Claim  10.2.5 -  Guidance Was Issued Timely  10.2.6 -  Provider Accurately Presented Circumstances in Writing  10.2.6.1 -  Alterna tive Basis for Satisfying the Presentation Condition 10.2.7 -  Provider Followed Guidance  10.2.8 -  Providers Reliance Was Reasonable  10.3 -  Penalty Considered 10.4 -  General Limitations on Scope  10.5 -  Notice of Penalty Waiver Policy  10.6 -  Request for a Penalty Waiver Determination  10.7 -  Jurisdiction  10.7.1 -  Jurisdiction re Error  10.7.2 -  Jurisdiction to Complete the Penalty Waiver Determination  10.8 -  Determining Whether the Guidance Was Erroneous  10.9 -  Completing the Penalty Waiver Determination  10.9.1 -  Timeliness of Request  10.9.2 -  Ripeness  10.9.3 -  Sufficient Information  10.9.4 -  Mootness  10.9.5 -  Required Conditions Other Than Error  10.9.6 -  Completing the Determination  10.10 -  Notice of the Penalty Waiver Determination  10.11 -  Reconsideration of the Penalty Waiver Determination  10.12 -  Recordkeeping  10.13 -  Reporting  10.14 -  Corrective Action  10.15 -  Effective Date  1 - Overview  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  This chapter addresses miscellaneous Medicare fee- for-service hold harmless provisions that are not addressed elsewhere.   10 - Erroneous Program Guidance: Basis to Waive Penalty (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  This section addresses Medicare contractor implementation of waiver of penalty when the provider or supplier acted upon erroneous guidance from the Medicare program.   10.1 - Policy  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  A provider or supplier may be subject to one or more penalties with respect to certain acts or omissions related to the pro vider or suppliers participation in the Medicare program.  However, 903(c) of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), which amended 1871(e) of the Social Security Act (the Act), establishes a basis to waive a pen alty in certain circumstances. Specifically, 903(c) provides that a provider or supplier shall not be subject to any penalty under an authority of Title XVIII of the Act or under an authority of Title XI of the Act (that relates to Title XVIII) if the bas is for imposing the penalty was an act or omission that resulted from the provider or supplier following erroneous guidance from the Medicare program.   The statute provides similarly for waiving interest on an overpayment that was caused by reliance upon e rroneous program guidance.  However, this section (i.e., 10 and its subsections) applies to the penalty provision only.  10.2  Basic Conditions That Must Be Met To Waive Penalty  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  Certain conditions must be met in order to invoke the 903(c) penalty waiver.  If all of the relevant conditions are met, then the provider or supplier will not be subject to a penalty for an act or omission that was caused by reliance on such guidance.  The following subsections specify the conditions that must be met to invoke the erroneous guidance penalty waiver.  10.2.1 - Guidance Was Erroneous (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The first condition that must b e met is that the Medicare program guidance must have been erroneous.  The analysis of whether the guidance was erroneous must consider two standards and both standards must be met to conclude that the guidance was erroneous for the purpose of invoking the  provisions of this section.   The first standard is that the guidance was, in fact, erroneous at the time of the provider or suppliers act or omission that is the basis for the penalty at issue.  If there was no error in the guidance then a waiver of the penalty may not be granted.  The second standard is that the error must be material.  That is, the error must be the necessary cause of the provider or suppliers act or omission that is the basis for the penalty at issue.  If the error is one that would n ot have caused a reasonable, similarly situated provider or supplier to act or to refrain from acting in the manner that is the basis of the penalty, then the contractor must conclude that a 903(c) -type error is not present and must, therefore, conclude f urther that a penalty waiver under 903(c) may not be granted.   10.2.2  Guidance Was Issued by the Secretary or Contractor  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The second condition that must be met is that the guidance must have been issued by the Secretary or by a Medicare contractor.   Guidance issued by an officer or employee of the Centers for Medicare and Medicaid Services (CMS) is considered to have been issued by the Secretary.   For the purposes of impleme nting this section, the term Medicare Contractor means  any Medicare Administrative Contractor (MAC) or an eligible entity with a contract under 1893 of the Act, including but not necessarily limited to a Program Safeguard Contractor.   Guidance issued by any other type of contractor as not qualifying to invoke the penalty waiver unless such guidance is confirmed and communicated by CMS or by a Medicare contractor, as defined above, before the provider or suppliers act or omission that is the basis for t he penalty at issue.  10.2.2.1 - Contractor Acted Within Scope of Authority  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  If a Medicare contractor issued the guidance, then the contractor must have been acting within the scop e of the contractors Medicare contract authority.   A Medicare contractor as defined in 10.2.2 shall be presumed to be acting within the scope of its Medicare contract authority (but only for the purpose of implementing this Section) if the guidance:   i) was issued by the contractor in the form of a general communication (e.g., a formally published contractor bulletin, a statement on the contractors Web site, etc.) or in the form of a communication directed to the particular provider or supplier that seeks to invoke the penalty waiver (or to such provider or suppliers billing agent, attorney, or other agent of such provider or supplier);   ii) addresses a matter that appears to be within the scope of Medicare fee- for-service (e.g., a provider or supplier m ay not presume that a communication pertaining to the Medicare Advantage Program or to the Medicare Part D drug benefit would also apply to the traditional Medicare fee- for-service program unless there is an express statement to such effect; similarly, a communication that addresses a contractors private- side health insurance business should not be relied upon for Medicare purposes); and  iii) addresses a matter that appears to be within the scope of responsibility for the type of Medicare contractor that issued the guidance (e.g., home health agencies enrolled in Medicare, which submit claims to a designated A/B MAC (HHH), may not presume that a DME MAC may instruct such agencies in matters related to claim submission (without some further explanation rega rding the DME MACs atypical involvement in home health agency billing matters).   However, if the provider or supplier knew or should have known of any fact that would have caused a reasonable provider or supplier to doubt whether the contractor may have been acting outside the scope of its Medicare contract authority, then the provider or supplier may not rely on the foregoing presumption but, rather, must enquire of the issuing Medicare contractor whether the contractor is authorized to issue the particul ar guidance.  Reconfirmation by the Medicare contractor that it possesses such authority shall be sufficient to satisfy this condition.   See 10.2.8 regarding the related issue as to whether the provider or suppliers reliance on the guidance was reasonabl e.  10.2.3 - Guidance Was in Writing  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The third condition that must be met is that the guidance must have been in writing.   The Medicare guidance is considered to be in writing if a hardcopy, e -mail, facsimile, floppy disk, or other similar, tangible, reproducible instrument of communicating information is furnished to the provider or supplier.  The guidance must possess some form of authentication (e.g., a letterhead) or other i ndicia that shows that the item was issued by CMS or a Medicare contractor.   Also, a CMS or contractors Web site posting qualifies as a writing.   The provider or supplier has the burden of documenting the existence of the writing.   10.2.4 - Guidance Related to Item, Service, or Claim  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The fourth condition that must be met is that the guidance must relate to the furnishing of an item or service or to the submission of a claim for be nefits for furnishing such item or service with respect to the provider or supplier submitting such claim.   Guidance related to any item or service furnished or not furnished to a Medicare beneficiary, regardless of whether the item or service is a Medicar e-covered item or service, is qualifying to meet the item or service prong of this condition.  Guidance related to submitting any filing, including but not necessarily limited to submitting an enrollment form, a claim, a cost report, a Certificate of Medic al Necessity (CMN), an Advance Beneficiary Notice (ABN), or additional documentation in support of any filing, is qualifying to meet the claim prong of this condition.   Guidance that is not directly related to the furnishing of an item or service or to the  submission of a claim is not within the scope of this Section.  Some guidances may require analysis to determine if they relate directly to such matters.  For example, a guidance that relates to Health Insurance Portability Accountability Act (HIPAA) comp liance, Clinical Laboratory Improvement Act (CLIA) compliance, copyright infringement (of, e.g., CPT coding and descriptors), institutional accreditation and individual licensure, State laws and regulations, Medicaid requirements, or other similar matters for which the legal authority is other than Title XVIII or Title XI of the Act, may not relate directly to the furnishing of an item or service or to the submission of a claim in the context of Medicare fee- for-service and must be analyzed to determine whether the guidance relates directly  to such actions in such context.   10.2.5 - Guidance Was Issued Timely  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The fifth condition that must be met is that the guidance under consideration must have been issued on or after July 24, 2003, and before the act or omission that was the basis for considering the imposition of the penalty.   10.2.6 - Provider Accurately Presented Circumstances in Writing (Rev. 739, Issued: 11- 01-05, Ef fective: 07 -24-03, Implementation: 01 -19-06)  The sixth condition that must be met is that the provider or supplier must have accurately and fully presented the circumstances (relating to the item, service, or claim) in writing to the Medicare contractor o r to CMS.   This condition is met if:   a) the presentation of circumstances was made by the provider or supplier or by a billing agent, attorney, or other agent acting on behalf of an expressly identified provider or supplier;