(Medicare General Information, Eligibility, and Entitlement)

Providers and suppliers have an obligation, under law, to conform to the requirements of the Medicare program.  Fraud and abuse committed against the program may be prosecuted under various provisions of the United States Code and could result in the imposition of restitution, fines, and, in some instances, imprisonment.  In addition, there is also a range of administrative sanctions (such as exclusion from participation in the program) and civil monetary penalties that may be imposed when facts and circumstances warrant such action.  Following are definitions and examples of fraud and abuse.  These definitions and examples give a better understanding of the types of practices that are forbidden, under law, in the Medicare program.   20.3.1 - Definition and Examples of Fraud  (Rev. 1, 09- 11-02)  Fraud is defined as making false statements or representations of material facts in order to obtain some benefit or payment for which no entitlement would otherwise exist.  These acts may be committed either for the person's own benefit or for the benefit of some other party.  In order to prove that fraud has been committed against the Government, it is necessary to prove that fraudulent acts were performed knowingly, willfully, and intentionally.   Examples of fraud include, but are not limited to, the following:    Billing for services that were not furnished and/or supplies not provided.  This includes billing Medicare for appointments that the patient failed to keep;    Altering claims forms and/or receipts in order to receive a higher payment amount;    Duplicating billings that includes billing both the Medicare program and the beneficiary, Medicaid, or some other insurer in an effort to receive payment greater than allowed;    Offering, paying, soliciting, or receiving bribes, kickbacks, or rebates, directly or indirectly, in cash or in kind, in order to induce referrals of patients or the purchase of goods or services that may be paid for by the Medicare program;    Falsely representing the nature of the services furnished.  This encompasses describing a noncovered service in a misleading way that makes it appear as if a covered service was actually furnished;    Billing a person who has Medicare coverage for services provided to another person not eligible for Medicare coverage; and    Using another person's Medicare card to obtain medical care.   20.3.2 - Definition and Examples of Abuse  (Rev. 1, 09- 11-02)  Abuse describes practices that, either directly or indirectly, result in unnecessary costs to the Medicare program.  Many times abuse appears quite similar to fraud except that it is not possible to establish that abusive acts were committed knowingly, willfully, and intentionally.  Following are three standards that CMS uses when judging whether abusive acts in billing were committed against the Medicare program:    Reasonable and necessary;    Conformance to professionally recognized standards; and    Provision at a fair price.   Examples of abuse include, but are not limited to, the following:    Charging in excess for services or supplies;    Providing medically unnecessary services or services that do not meet professionally recognized standards;    Billing Medicare based on a higher fee schedule than for non- Medicare patients;    Submitting bills to Medicare that are the responsibility of other insurers under the Medicare secondary payer (MSP) regulation; and    Violating the participating physician/supplier agreement.  Although these types of practices may initially be categorized as abusive in nature, under certain circumstances they may develop into fraud if there is evidence that the subject was knowingly and willfully conducting an abusive practice.   30 - Federal Government Administration of the Health Insurance Program  (Rev. 1, 09- 11-02)  The DHHS has overall responsibility for administering the hospital insurance and voluntary SMI programs.  Two major agencies -  CMS and the Public Health Service - are involved in specified administrative functions.   30.1 - CMS Responsibilities  (Rev. 1, 09- 11-02)  The CMS is responsible for policy formulation.  The central and regional offices are responsible for the general management and operation of the program.  In brief, CMS's responsibilities include the following:    Determining an individual's entitlement to benefits in consultation with the Social Security Administration (SSA);   Determining the nature and duration of services for which a beneficiary's benefits may be paid;    Establishing, maintaining, and administering agreements with State agencies, providers of services, and A/B MACs (A) and (HHH);    Establishing operational policy for contractors;    Developing operational instructions and official interpretations of policy for contractors;    Formulating major policies regarding conditions of participation for providers in consultation with the Public Health Service;    Developing and maintaining statistical research and actuarial programs; and    Managing general finances of the program; and    Managing the Medicare Premium Collection Operation.  The regional offices are responsible for assuring that contractors meet applicable Federal requirements under the provisions of their contracts.  They also:    Provide liaison, direction, and technical assistance to contractors in the day -to-day management of their operations;    Interpret CMS guidelines, policies, and procedures applicable to contractor activities;    Analyze contractor budgets and spending patterns to assure that funds are economically and appropriately utilized;    Conduct assessments of contractor operations;    Review contractor actions; and    Provide feedback to each contractor.   30.2 - Public Health Service Responsibilities  (Rev. 1, 09- 11-02)  The Public Health Service is responsible for administering the professional health aspects of the program.  In brief, its responsibilities include the following:    Consulting and recommending to CMS matters concerning the development of health and safety standards and other guidelines needed for determining whether providers of services meet the conditions of participation under the program;    Consulting and advising State agencies concerning the application of standards for providers; and    Coordinating programs and activities necessary in studying the utilization of services under the program.   30.3 - State Agencies  (Rev. 1, 09- 11-02)  The States, by agreement with the Secretary, are assigned significant administrative functions to the extent that each is willing and capable of discharging such responsibilities.  30.3.1 - Certification by State Agencies  (Rev. 1, 09- 11-02)  Facilities desiring to participate in either the Medicare or Medicaid programs must meet participation conditions for certification.  State agencies certify to DHHS whether providers satisfy, and continue to satisfy, their respective conditions of participation in the Medicare and Medicaid programs.  The Secretary, DHHS, certifies facilities requesting participation in the Medicare and Medicaid programs.  States certify those facilities that request participation in the Medicaid program only.  The State function of making certifications is intended to be a natural adjunct to ongoing State activities (such as the licensing of health care facilities and the setting of standards).   30.3.2 - Consultation by State Agencies  (Rev. 1, 09- 11-02)  A State consults with providers of services that need and request participation condition assistance.  For Medicare participation, the Secretary, DHHS, must approve the consultation service rendered by the State certifying agency.   30.3.3 - Coordination by State Agencies  (Rev. 1, 09- 11-02)  A State coordinates activities with other State programs that involve payment for health care, quality of care, and location of health facilities.  Coordinating these activities is essential in assuring effective and economical use of existing State facilities and trained personnel and to prevent duplication of effort.  40 - Role of A/B MACs (A) and (HHH)  (Rev. 28; Issued:  08- 12-05; Effective/Implementation:  09 -12-05)  The A/B MAC (A) and (HHH) is a public or private agency or organization that has entered into an agreement with CMS to enroll legitimate providers into the Medicare program and process Medicare claims under both Part A and Part B services under the supplementary medical insurance program (e.g., hospitals, SNFs, HHAs, hospices, CORFs, OPTs, occupational therapy, and speech -language pathology providers, and ESRD facilities).   A/B MACs (A) and (HHH) make payments to providers.  The amount of payment to a provider is restricted to the lower of the billed charge, the reasonable cost of covered services or the fee schedule amount.  Hospices are paid on a per diem amount that is prospectively set. SNFs and HHAs are paid based on a Prospective Payment System (PPS).  (See Provider Reimbursement Manual, Part 1, 2800ff.)   Hospitals are paid based on the PPS. Under this system, Medicare payment is made at a predetermined, specific rate for each hospital discharge.  This statement applies to inpatient for acute care hospitals and to inpatient rehabilitation hospitals.  Whereas inpatient acute and rehab PPS payment is based on the discharge date, Outpatient PPS (OPPS) payments are based on Ambulatory Patient Classification payment for the date of service.   The amount of payment to other types of providers is restricted to the lesser of (a) the reasonable cost of covered services and items; or (b) the billed charges with respect to such services; or (c) the fee schedule amount.   In addition, A/B MACs (A) and (HHH) assist in applying safeguards against unnecessary use of covered services, furnish consultative services to serve as a center for communicating with providers, conduct audits of provider records, assist in the beneficiary appeals process, and provide information and advice to institutions and organizations that wish to qualify as providers of services.   (See http://www.cms.gov/Medicare/Medicare- Contracting/Medicare- Administrative -Contractors/Home- Health -Hospice-Regions.html  for a list of A/B MACs (A) and (HHH) and service areas.)   40.1 - Assignment of A/B MAC (A) and (HHH)  (Rev. )  CMS assigns MACs based upon jurisdictions as described in:  http://www.cms.gov/Medicare/Medicare-Contracting/Medicare- Administrative -Contractors/MACJurisdictions.html    There are no alternate selections permitted, effective with the implementation of MACs.   40.2 - A/B MAC (A) and (HHH)  Service to HHAs  (Rev. )  All HHAs bill the assigned A/B MAC (HHH) and are paid by that MAC.  In the case of HHAs and hospices based in another Medicare provider (e.g., a hospital or SNF), audit, cost report settlement, and other fiscal functions (such as setting interim payment rates) are performed by the A/B MAC (A) serving the parent provider.  50 - Role of A/B MACs (B) and DME MACs  (Rev. 1, 09-11-02)  The law requires the Secretary, DHHS, to enter into contracts with A/B MACs (B) and DME MACs to serve in the operation and administration of the non-provider Part B program.  A/B MACs (B) enroll physicians, non- physician health care practitioners and other entities that will submit claims to the A/B MAC (B), and process Medicare claims and make payments for services and supplies covered by Part B.  Other major functions include, for example, controlling over-utilization and communicating with beneficiaries and the health community.  DME MACs have been given the responsibility of processing durable medical equipment, prosthetic, orthotic, and supply (DMEPOS) claims.  See Claims Processing Manual, chapter 1, for description of jurisdiction.  60 - Background and Responsibilities of the Peer Review Organization (PRO)  (Rev. 1, 09- 11-02)  Section 1153 of the Social Security Act (the Act) requires the Secretary to enter into contracts with physician- approved or physician- access organizations defined as PROs.  The PROs are organizations who are responsible for monitoring the quality of care provided to Medicare patients by hospitals, SNFs, home health agencies, Medicare+Choice plans, and other types of health care providers.   PRO review is governed by titles XI and XVIII of the Act as amended, and by regulations contained in:    42 CFR 411 -  Limitation on liability;    42 CFR 412 -  Outlier review, diagnosis related group (DRG) validation, and hospital notices of non coverage;    42 CFR 417.605 -  Immediate PRO review of Health Maintenance Organization (HMO)/Competitive Medical Plan (CMP) notices of discharge;    42 CFR 422.622 -  Immediate review of Medicare+Choice discharge notices;    42 CFR 475 -  Definition of eligible organizations and area designation;    42 CFR 476 -  Assumption and conduct of review;    42 CFR 478 -  PRO reconsideration and appeals;    42 CFR 480 -  Disclosure of information;    42 CFR 482 -  Hospital conditions of participation; and    42 CFR 1004 -  PRO recommendations of sanctions.  60.1 - Purpose of PRO Review for the Individual Medicare Beneficiaries  (Rev. 1, 09- 11-02)  The PROs review items or services provided to Medicare beneficiaries to determine:    Whether services provided or proposed to be provided are reasonable and medically necessary for the diagnosis and treatment of illness or injury, or to improve functioning of a malformed body member, or for prevention of an illness, or for the palliation and management of terminal illness;