(Medicare Claims Processing Manual)

 A sole proprietor transfers title and property to another party;    In the case of a partnership, there is an addition, removal, or substitution of a partner unless the partners expressly agree otherwise;    An incorporated organization merges with an incorporated entity that is approved by the program and the latter entity is the surviving corporation.  It also occurs when two or more corporate providers consolidate and the consolidation results in the creati on of a new corporate entity;    An unincorporated organization (a sole proprietorship or partnership) becomes incorporated; or    The lease of all or part of an entity constitutes a change of ownership of the leased portion.  When an organizations agreement is terminated, whether by the entity or by CMS, no payment is available to the provider for services it furnishes to Medicare beneficiaries on or after the effective date of the termination.   40.1.3 - Expiration and Renewal- Nonrenewal of SNF Term Agreements  (Rev. 1, 10- 01-03) A3-3008.3, and Pub 100 -1, Chapter 5   All agreements with skilled nursing facilities must be for a specified term of up to 12 full calendar months with fixed expiration dates unless termination occurs according to 40.1 and 40.2. The agreement expires at the close of the last day of its specified term and is not automatically renewable from term to term. When the term of an agreement is extended (see 40.3.1), the close of the last day of its specified term is the close of the day of the extension of the agreement. Thus, when the term of an agreement is extended, the providers participation in the program continues, and the agreement does not expire until the close of the last day to which it has been extended.   Since an agreement with an SNF is not automatically renewable from term to term, each term agreement with an SNF requires that the SNF qualify for participation and that its agreement be accepted for filing. A participating SNF may, however, continue its participation under the agreement form  previously accepted for filing provided the SNF continues to qualify for participation, and the agreement form is again accepted for filing and renewed for a term which begins on the date immediately following the clos e of the last day of the prior term of the agreement. When the requirements for participation continue to be met, there is no limit to the number of times that the SNFs agreement form may again be accepted and renewed for a specified term.   When the time -limited agreement (including an agreement which has had its term extended) is renewed on the day immediately following the close of the last day of its term, the expiration of the agreement is not considered a termination of participation in the program.   However, once an agreement with an SNF is (1) not renewed, or (2) voluntarily terminated by the SNF, or (3) involuntarily terminated (including cancellations) by the Secretary, the previously accepted agreement cannot again be accepted and renewed. In such cases, the SNF is required to execute and file a new agreement if it is again found eligible to participate in the Medicare program and must submit a Form CMS -855A as a brand new provider . The effective date of the new agreement must be determined in accordance with regulatory provisions ( 42 CFR  489.13).   The Secretarys determination not to accept and renew a SNF agreement is a determination relating to the qualifications of the SNF in the period immediately following the close of the SNFs existing agreement; and the SNF is entitled to request a reconside ration of the determination in accordance with the appeals procedure contained in 42 CFR  Part 405 Subpart  O. Such determinations involve a finding that:    Based on a State agency resurvey and recertification, the SNF will not be approved for a period of certification because it is out of compliance with one or more conditions of participation;    Based on a State agency resurvey and recertification, the SNF continues to be out of compliance with the same standard(s) in the conditions of participation as were found out of compliance during the term of the agreement and the facility will not be approved for a new period of certification; or    The SNF has violated the terms of its agreement or the provisions of title XVIII or regulations promulgated thereunder.   In cases of nonrenewal by the Secretary, the FIs role is the same as for involuntary terminations. (See 40.2.1).   40.2 - Involuntary Terminations  (Rev. 1, 10- 01-03) A3-3008.2, RHC -331  The Secretary may terminate an agreement with a provider if it is determined that the provider:    Is not complying fully (or substantially in the case of SNFs) with the provisions of the agreement or with the applicable provisions of title XVIII of the Act and regulations;    No longer meets the appropriate conditions (requirements for SNFs) of participation;   Has failed to supply information which is necessary to determine whether payments are due or were due and the amounts of such payments; or    Refuses to permit examinations of fiscal and other records, including medical records.   The cancellation of a SNF agreement is viewed as an involuntary termination of the agreement by the Secretary for cause.  Such actions involve a finding that the SNF has not satisfactorily completed its written plan providing for the correction of deficiencies with respect to one or more of the standards in the applicable requirements of participation, or that the facility has not made substantial effort and progress in correcting such deficiencies.   A provider which is dissatisfied with the Secretarys determination terminating its agreement is entitled to request a hearing thereon in accordance with the appeals procedures contained in 42 CFR  Part 498. There is no  reconsideration step before the opportunity for a hearing.  For the FIs role in processing involuntary terminations, see 40.2.1.  NOTE:  The involuntary termination of a hospitals approval authorizing it to provide extended care services, i.e., to be a swing bed facility, (see Chapter 3) does not automatically result in the involuntary termination of the hospitals agreement relating to the provision of hospital services.   40.2.1 - Processing Involuntary Terminations  (Rev. 1, 10- 01-03) A2-2800.3   When there has been a determination by the RO that an institution or agency no longer qualifies as a provider of services, the RO notifies the provider in writing that termination of its agreement has been recommended. A copy of this notification is sent t o the servicing FI so that it is aware of the potential termination. However, the FI should not divulge this information.  If CMS central office decides that termination of the agreement is appropriate, it establishes the effective date of termination, notifies the provider in writing, and notifies the RO. The RO immediately arranges for publication of the required notice to t he public and sends a formal notice of termination to the FI via Form CMS -2007 (see 40).   40.2.2 - FI Report on Provider Deficiencies  (Rev. 1, 10- 01-03) A2-2801, A2- 2801.1   Most terminations of provider agreements are based primarily on health and safety factors, but fiscal considerations may also play an important role in the decision to terminate. The provider agreement and the Social Security Act impose certain obligations  on the provider with respect to costs, charges, financial records, and related matters.   Deficiencies in these areas may, of themselves, or in the combination with deficiencies in health and safety factors, constitute significant reasons for termination.  Upon receipt of a State agency recommendation of termination, the RO notifies the servicing FI and requests a report concerning any reimbursement aspects that might constitute additional grounds for termination. The FIs report should include such informat ion as: cost reports not filed; cost reports past due and a description of the action taken; the providers refusal to permit the necessary examination of its fiscal records; status of any cost report settlements still pending; provisions for recoupment of  current financing and accelerated payments; amount of unpaid billings for covered services rendered which may be used as an offset against any overpayment; and any potential overpayment in the current period.  40.2.2.1 - Subsequent Communications With Provider  (Rev. 1, 10- 01-03) A2-2801.2   Following release of the report to the RO, any communication between the provider and the FI related to reimbursement or other problems that could constitute grounds for termination should be immediately reported to the RO. The RO should also be informed in advance  of any subsequent onsite visits to the provider regarding such matters. Unrecorded communications, visits, or correctional allegations that were not known and taken into consideration by CMS before final termination may cause embarrassment or even result in failure to sustain the termination action at later stages of the proceedings, particularly if the issue goes to a formal hearing. Even after final terminatio n action, any such contacts with the provider may be pertinent to proper handling of the case by CMS, and therefore the FI must promptly forward the information to the RO.  40.3 - Readmission to Medicare Program After Involuntary Termination  (Rev. 1, 10- 01-03) A2-2804   After the involuntary termination of its agreements, a health facility cannot participate again as a provider unless:    The reasons for termination of the prior agreement have been removed, and    There is reasonable assurance that they will not recur.   The RO makes the final decision as to whether the facility is eligible for readmission. In doing so, it reviews the case in its entirety and makes the final decision regarding the following:    Correction of deficiencies upon which the termination was based;    Reasonable assurance of continued compliance, and    Reasonable assurance of availability of information pertinent to reasonable cost reimbursement.   The RO will then process the case in the same way as an initial certification.   40.3.1 - Effective Date of Provider Agreement  (Rev. 1, 10- 01-03) A2-2804.1   Since one of the key issues is whether the facility has furnished reasonable assurance that the reasons for termination will not recur, the provider agreement cannot be effective before the date on which reasonable assurance is deemed to have been prov ided.  Generally, a facility will be required to operate for a period of 60 days without recurrence of the deficiencies that were the basis for the termination. The provider agreement will be effective with the end of the 60- day period.  If corrections were made before filing the new request for participation, the per iod of compliance before filing the new request will be counted as part of the 60- day period; however, in no case can the effective date of the provider agreement be earlier than the date of the new request for participation.  Exceptions  to the 60- day period of compliance will be made where:    Structural changes have eliminated the reasons for termination. Reasonable assurance will be considered established as of the date such structural changes were completed. The effective date will be that date or the date of filing the new request to parti cipate, whichever is later.    "Reasonable assurance is not established even after 60 days of compliance, because of the facilitys history of misrepresentation or of making temporary corrections and then relapsing into the old deficiencies that were the basis for termination. The effe ctive date in such cases would be the earliest date after 60 days at which reasonable assurance is deemed to have been established, or the filing date of the new request to participate, whichever is later.   40.3.2 - Fiscal Considerations in Provider Readmission to Medicare Program After Involuntary Termination  (Rev. 1, 10- 01-03) A2-2805, RHC -334  Upon being notified that a terminated provider has filed a request for participation, the RO telephones the FI which previously serviced the facility and requests information concerning any unresolved financial problems (e.g., an overpayment that must be recovered) so that the RO can determine whether such issues must be resolved before the facility is permitted to participate.   The RO also contacts the FI that will service the facility upon readmission (this may be either the FI which previously serviced the facility or another FI) and asks it to make sure that the facility has made adequate provisions for furnishing the financia l and accounting data required under the participation agreement. Where termination was based on fiscal considerations, either entirely or in combination with deficiencies in health and safety factors, the FI will also be requested to check and report on w hether the deficiencies have been corrected. This report should include:    The basis for believing that the deficiencies that led to termination of the provider agreement have (or have not) been corrected.    If corrected, a description of:   o When and how this was done;   o The evidence showing compliance has existed for a sufficient period of time; and   o The FIs reasons for concluding that the deficiencies will not recur.    A description of any other fiscal and reimbursement problems and the basis of believing these should (or should not) affect certification of the facility.  40.4 - Payment for Services Furnished After Termination, Expiration, or Cancellation of Provider Agreement  (Rev. 980, Issued: 06-14-06, Effective: 10-01-06, Implementation: 10-02-06)  The CMS RO will inform the FI upon termination, expiration or cancellation of a provider agreement.  Effective with the date a provider agreement under 1866