Source: https://www.federalregister.gov/documents/2007/07/20/E7-14115/medicaid-integrity-program-limitation-on-contractor-liability
Timestamp: 2018-03-21 22:51:45
Document Index: 640574167

Matched Legal Cases: ['art 455', 'ART 455', '§\u2009455', '§\u2009455', '§\u2009455', '§\u2009455', '§\u2009455', '§\u2009455', '§\u2009455', '§\u2009455', '§\u2009455', 'art 455', '§\u2009455']

Federal Register :: Medicaid Integrity Program; Limitation on Contractor Liability
Medicaid Integrity Program; Limitation on Contractor Liability
A Proposed Rule by the Centers for Medicare & Medicaid Services on 07/20/2007
72 FR 39776
CMS-2264-P
0938-AO88
E7-14115
B. Medicaid Integrity Program
Limitations on Contractor Liability
List of Subjects 42 CFR in Part 455
PART 455—PROGRAM INTEGRITY; MEDICAID
https://www.federalregister.gov/d/E7-14115 https://www.federalregister.gov/d/E7-14115
Section 6034 of the Deficit Reduction Act of 2005 established the Medicaid Integrity Program to promote the integrity of the Medicaid program by authorizing the Centers for Medicare and Medicaid Services (CMS) to enter into contracts with contractors that will review the actions of individuals or entities furnishing items or services (whether fee-for-service, risk, or other basis) for which payment may be made under an approved State plan and/or any waiver of the plan approved under section 1115 of the Social Security Act; audit claims for payment of items or services furnished, or administrative services furnished, under a State plan; identify overpayments of individuals or entities receiving Federal funds; and educate providers of services, managed care entities, beneficiaries, and other individuals with respect to payment integrity and quality of care. This proposed rule would set forth limitations on a contractor's liability while performing these services under the Medicaid Integrity Program.
This proposed rule would provide for limitation of a contractor's liability for actions taken to carry out a contract under the Medicaid Integrity Program. The proposed rule would, to the extent possible, employ the same or comparable standards and other substantive and procedural provisions as are contained in section 1157 (Limitation on Liability) of the Social Security Act.
To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on August 20, 2007.
Start Printed Page 39777
In commenting, please refer to file code CMS-2264-P. Because of staff and resource limitations, we cannot accept comments by facsimile (Fax) transmission.
2. By regular mail. You may mail written comments (one original and two copies) to the following address Only: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-2264-P, P.O. Box 8014, Baltimore, MD 21244-8014.
3. By express or overnight mail. You may send written comments (one original and two copies) to the following address Only: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-2264-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments (one original and two copies) before the close of the comment period to one of the following addresses. If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786-8148 in advance to schedule your arrival with one of our staff members. Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security Boulevard, Baltimore, MD 21244-1850.
Barbara Rufo, 410-786-5589 or Crystal High, 410-786-8366.
Submitting Comments: We welcome comments from the public on all issues set forth in this rule to assist us in fully considering issues and developing policies. You can assist us by referencing the file code CMS-2064-P and the specific “issue identifier” that precedes the section on which you choose to comment.
States and the Federal Government share in the responsibility for safeguarding Medicaid program integrity. States must comply with Federal requirements designed to ensure that Medicaid funds are properly spent (or recovered, when necessary). The Centers for Medicare and Medicaid Services (CMS) is the primary Federal agency responsible for providing oversight of States' activities and facilitating their program integrity efforts.
Section 6034 of the Deficit Reduction Act (DRA) of 2005 (Pub. L. 109-171, enacted on February 8, 2006) established the Medicaid Integrity Program (the Program), within CMS to combat Medicaid fraud and abuse. For the first time, the Program authorizes the Federal government to directly identify, recover, and prevent inappropriate Medicaid payments. It would also support the efforts of the State Medicaid agencies through a combination of oversight and technical assistance.
Although individual States work to ensure the integrity of their respective Medicaid programs, the Program represents our first comprehensive national strategy to detect and prevent Medicaid fraud and abuse. The Program would provide CMS with the ability to more directly ensure the accuracy of Medicaid payments and to deter those who would exploit the program.
Section 6034 of the DRA amended title XIX of the Social Security Act (the Act), (42 U.S.C. 1396 et seq.) by redesignating the old section 1936 as section 1937; and inserting the new section 1936 “Medicaid Integrity Program.”
The new section 1936 of the Act states that the Secretary promote the integrity of the Medicaid program by entering into contracts with eligible entities to carry out the following activities:
1. Review of the actions of individuals or entities furnishing items or services (whether on a fee-for-service, risk or other basis) for which payment may be made under a State plan approved under title XIX (or under any waiver of this plan approved under section 1115 of the Act) to determine whether fraud, waste, and/or abuse has occurred, or is likely to occur, or whether these actions have any potential for resulting in an expenditure of funds under title XIX in a manner that is not intended under the provisions of title XIX.
2. Audit of claims for payment for items or services furnished, or administrative services rendered, under a State plan under title XIX, including cost reports, consulting contracts; and risk contracts under section 1903(m) of title XIX.
3. Identification of overpayments to individuals or entities receiving Federal funds under title XIX.
4. Education of providers of services, managed care entities, beneficiaries, and other individuals with respect to payment integrity and quality of care.
Section 6034 of the DRA also mandated that the Secretary will by regulation provide for the limitation of a contractor's liability for actions taken to carry out a contract under the Medicaid Integrity Program.
[If you wish to comment on issues in this section, please include the caption “Provisions of the Proposed Rule” at the beginning of your comments.] Start Printed Page 39778
Contractors that perform activities under the Medicaid Integrity Program (the Program), would be reviewing activities of providers and others seeking Medicaid payment for providing services to Medicaid beneficiaries. In an effort to reduce or eliminate the Program contractor's exposure to possible legal action from entities it reviews, section 6034 of the DRA requires that we, by regulation, limit the Program contractor's liability for actions taken in carrying out its contract. We must establish, to the extent we find appropriate, standards and other substantive and procedural provisions that are the same as, or comparable to, those contained in section 1157 of the Act.
Section 1157 of the Act states that any organization having a contract with the Secretary, its employees, fiduciaries, and anyone who furnishes professional services to these organizations are protected from civil and criminal liability in performing their duties under the Act or their contract, provided these duties are performed with due care.
Following the mandate of section 6034 of the DRA, this proposed rule, in § 455.1, Basis and scope, would add a new paragraph (c) stating that subpart C implements section 1936 of the Act. Section 1936 of the Act establishes the Medicaid Integrity Program under which the Secretary will promote the integrity of the program by entering into contracts with eligible entities to carry out the activities under subpart C. In addition, new subpart C, § 455.200(a), would specify the statutory basis of proposed new subpart C, which would implement section 1936 of the Act, which states that the Secretary will promote the integrity of the Medicaid program by entering into contracts with eligible entities to carry out the activities under subpart C. Section 455.200(b) would provide the scope for the limitation on a contractor's liability to carry out a contract under the Medicaid Integrity Program as proposed under new § 455.202. Section 455.202(a) would protect Program contractors from liability in the performance of their contracts provided they carry out their contractual duties with due care.
In accordance with section 6034 of the DRA, we propose to employ the same standards for payment of legal expenses as are contained in section 1157(d) of the Act. Therefore, § 455.202(b) would provide that we would make payment to Program contractors, their members, employees, and anyone who provides legal counsel or services to them, for expenses incurred in the defense of any legal action related to the performance of the Program contract. We also propose that any and all payment(s) and the amount of each payment(s) if any, would be determined exclusively by us, and conditioned upon (1) the reasonableness of the expense(s); (2) the amount of government funds available for payment(s); and (3) whether the payment(s) is (are) allowable under the terms of the contract.
In drafting § 455.202, we considered employing a standard for the limitation of liability other than the due care standard. We considered whether it would be appropriate to provide that a contractor would not be civilly liable by reason of the performance of any duty, function, or activity under its contract provided the contractor was not grossly negligent in that performance. However, section 6034 of the DRA requires that we employ the same or comparable standards and provisions as are contained in section 1157 of the Act. This approach is consistent with a similar approach taken in the Medicare Integrity Program (see 70 FR 35204), which has virtually identical statutory limitations on contractor liability language. Therefore, we do not believe that it would be appropriate to expand the scope of immunity to a standard of gross negligence, as it would not be a comparable standard to that set forth in section 1157(b) of the Act.
[If you wish to comment on issues in this section, please include the caption “Regulatory Impact Statement” at the beginning of your comments.]
Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). This rule would not reach the economic threshold and thus is not considered a major rule.
The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $6 million to $29 million in any 1 year. Individuals and States are not included in the definition of a small entity. We are not preparing an analysis for the RFA because we have determined that this rule would not have a significant economic impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Core-Based Statistical Area and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined that this rule would not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $120 million. This rule would have no consequential effect on State, local, or tribal governments or on the private sector. Start Printed Page 39779
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. Since this regulation would not impose any costs on State or local governments, the requirements of E.O. 13132 are not applicable.
2. In § 455.1, add new paragraph (c) to read as follows:
§ 455.1
3. New subpart C, consisting of § 455.200 and § 455.202, is added to part 455 to read as follows:
455.202
Limitation on contractor liability.
(a) Statutory basis. This subpart implements section 1936 of the Act that establishes the Medicaid Integrity Program under which the Secretary will promote the integrity of the program by entering into contracts with eligible entities to carry out the activities under this subpart C.
(b) Scope. This subpart provides for the limitation on a contractor's liability to carry out a contract under the Medicaid Integrity Program.
§ 455.202
Approved: April 20, 2007.
[FR Doc. E7-14115 Filed 7-19-07; 8:45 am]