(SEC)

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;   b) the presentation of circumstances was made, directly or indirectly, to the Medicare contractor or to the CMS component that issued the guidance upon which the provider or supplier relied;  c) the presentation of circumstances included all relevant and material facts (NOTE:   Although the burden is on the provider or supplier to present all relevant and material facts, if the contractor or CMS component that issued the guidance took notice of certain facts in issuing such guidance, then the contractor implementing this section shall also take notice of such facts as if they had been presented by the provider or supplier.);   d) the circumstances were presented accurately, i.e., there was no material ambiguity or misstatement of fact; and   e) the presentation was m ade in writing (the term writing is to be broadly construed as specified in 10.2.3).  10.2.6.1 - Alternative Basis for Satisfying the Presentation Condition  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The presentation  condition described 10.2.6 shall be deemed to be met if the guidance was communicated generally to all providers and/or suppliers or to a class of providers or suppliers to which the affected provider or supplier belongs rather than having been issued i n response to a specific presentation of circumstances by the provider or supplier that is facing the imposition of the penalty.   10.2.7 - Provider Followed Guidance  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The seventh c ondition that must be met is that the provider or supplier must have followed the guidance provided by the Medicare contractor or by CMS.  The provider or suppliers act or omission must have been in substantial, but not necessarily complete, accord with t he terms of the guidance.  Deviation from the guidance, if immaterial, would not necessarily be disqualifying.  But even a small deviation from the guidance, if material, could be disqualifying.  In general, the greater the specificity of the guidance, the  greater must be the provider or suppliers close adherence to such guidance.  In addition, the provider or suppliers act or omission in following the guidance must be either the same act or omission that is the basis of the penalty or must be the direct,  but not necessarily the immediately proximate cause of such act or omission.   10.2.8 - Providers Reliance Was Reasonable  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The eighth condition that must be met is that the provider or suppliers reliance on the guidance provided by the Medicare contractor or by CMS must have been reasonable.  A Medicare program communication (which qualifies as a writing) that was issued to the provider or supplier (specifically, or as part of a class, or to all providers and suppliers generally, that is directly on point with respect to the matter presented by the provider or supplier, and that purports to speak definitively to such matter, creates a rebuttable presumption that the provider or suppliers reliance was reasonable.   However, if the communication, by its own terms, does not purport to be definitive, i.e., it contains relevant and material speculations, disclaimers, a set of possibilities, or other equivocal language, or a request for additional information, such that a reasonable provider or supplier would consider that a further exchange of views or a further presentation of facts, or an additional inquiry was warranted, then no such rebuttable presumption is created.   Also, certain electronically transmitted communications, such as e- mail, although qualifying as a writing, may, in a particular circumstance, be so sparse in content or informal in manner of expression, or may be sent by an individual who is not likely to be authorized t o furnish the type of guidance that was issued, that a reasonable provider or supplier would question whether reliance on the guidance, without further inquiry or confirmation, would be reasonable.   Further, the guidance must appear accurate on its face to  any reasonable, similarly situated provider or supplier.  One circumstance when it would not be reasonable to rely on a particular guidance is when such guidance is in direct conflict with a then current, Medicare program issuance that is applicable in th e circumstance addressed by the guidance (unless the guidance itself references such official issuance in terms of supersession or resolving an apparent conflict).  Another circumstance when it would not be reasonable to continue to rely on a particular guidance is when the guidance, once accurate (or arguably so), has been superseded by new policy that has been communicated by a program issuance to which the provider or supplier was or should have been privy.  A provider or suppliers reliance on a particu lar guidance may become questionable or may be determined to be unreasonable if a claim or other filing that was submitted pursuant to such guidance is returned as unprocessable, is denied in whole or in part, is challenged, rejected, or if, in any in othe r way, a Medicare program communication or other act or omission by CMS or a Medicare contractor would indicate to a reasonable provider or supplier that continued reliance on such guidance would be unreasonable without confirming the continuing validity of the guidance.   If the provider or supplier had received notice of the erroneous nature of the prior guidance, then such provider or supplier shall be bound by the terms of such subsequent notice and may not thereafter rely on the prior, erroneous guidanc e.  10.3 - Penalty Considered  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  In the context of this section, the term penalty is to be broadly construed to include, but not necessarily limited to, a civil money penalty, an a ssessment, a sanction, a suspension, a termination, or other, similar penalty.   Examples of matters that are illustrative of a penalty under this section include but are not necessarily limited to: specified remedies under 1819(h)(2)(B),), a sanction under 1833(h)(5)(D), a penalty under 1834(j)(2)(A)(iii), sanctions under 1842(j)(2), 1842(k) or 1842(n)(3), intermediate sanctions under 1846, sanctions under 1848(g)(1)(B), and actions under 1866(b)(2), 1866(d) or 1866(i).   The 10% penalty for fil ing a stale assigned claim, although also illustrative of a penalty under this section, is also subject to the broader conditions for waiver under 1848(g)(4)(B) of the Act.  See Pub. 100- 04, Medicare Claims Processing Manual, Chapter 1, 70.8.8 et seq.  Although the erroneous -guidance -based penalty waiver of 903(c) applies to all penalties that may be imposed by CMS, this section applies only to those penalties for which implementation has been or may hereafter be delegated to one or more Medicare contr actors.  Moreover, the foregoing identification of penalties, which are illustrative of 903(c) penalties, does not constitute a delegation to contractors to impose such penalties.  Any such delegation would be made in provisions relating to the policies a nd procedures specific to such penalties or in other program issuances.  Accordingly, whether a contractor may grant a penalty waiver in a particular matter will depend, in part, on whether the contractor has been delegated the authority to impose the pena lty itself (whether as a standing matter or under a specific, ad hoc delegation on a particular matter or in a particular circumstance).   The term penalty is not to be construed so broadly that the application of the penalty waiver would forgive or rende r moot a Medicare program policy or procedural requirement.  Matters that are not penalties under this section include but are not necessarily limited to the following types of actions: a rejection or a return -to-provider action (RTP) on a claim or bill,  an initial determination on a claim or bill, a redetermination or reconsideration of such initial determination, a contractor hearing decision regarding such initial determination, a national coverage decision (NCD), a local coverage decision (LCD), a det ermination made pursuant to a local medical review policy (LMRP), a coding decision, an enrollment decision by a contractor (including the National Supplier Clearinghouse), a notice of program reimbursement (NPR), an overpayment, accrued interest on an uns atisfied overpayment, a CMS Ruling, the Medicare allowed amount or the Medicare payment for a covered item or service, a determination regarding whether a matter is within the scope of this section, or other, similar customary Medicare fee- for-service prog ram determinations that are not intended to penalize a particular provider or supplier for its acts or omissions.   NOTE:   Although the foregoing types of actions are not penalties within the scope of this Section, if an erroneous guidance has been issued on such a matter, corrective action may be available under an authority other than this section.   10.4 - General Limitations on Scope  (Rev. 739, Issued: 11- 01-05, Effective: 07- 24-03, Implementation: 01 -19-06)  The application of 903(c) to waive (or to reverse) the imposition of a penalty has no bearing whatsoever on any other Medicare determination that is adverse to the provider or supplier (such as the denial of a claim in whole or in part).  That is, a provider or suppliers reliance on erroneous gui dance has no bearing on an adverse determination on a claim, cost, report, etc., and on the application of Medicares rules with respect to the furnishing or non- furnishing of items and services and the submission or non- submission of claims and other fili ngs.  Further, this section does not supersede, nor take precedence over, any other policy or process under any other authority delegated to Medicare contractors to waive, forgive, rescind, or otherwise render inapplicable a penalty when, under such other authority, it is appropriate and administratively more efficient to do so.  Moreover, a penalty waiver determination made under this section does not have precedential effect with respect to any consideration as to whether a provider or supplier was witho ut fault under 1870 or 1879 of the Act with respect to the same or related matter.   Finally, this section does not address the application of 903(c) with respect to any penalty for which the authority to impose the penalty has been delegated to the Off ice of the Inspector General, Department of Health and Human Services (DHHS) or that has been delegated to CMS but not redelegated to one or more Medicare contractors.  To the extent that the discussion of penalties in 10.3 may be construed as being in conflict with the foregoing sentence, the instruction contained in the foregoing sentence prevails.  However, CMS may elect to delegate a penalty waiver determination to a Medicare contractor on an ad hoc basis regarding a penalty that it has the authority t o impose.  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.