Kentucky Administrative Regulations › Title 907 - CABINET FOR HEALTH AND FAMILY SERVICES - DEPARTMENT FOR MEDICAID SERVICES › Chapter 1 - Medicaid Services › Section 907 KAR 1:671 - Conditions of Medicaid provider participation; withholding overpayments, administrative appeal process, and sanctions

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO: KRS Chapter 13B, 194.515, 205.510-205.990, 312.015,
				Chapter 360,
				42 C.F.R.
				431.107,
				431.151-431.154,
				447.10,
				455, 1002, 1003, 42 U.S.C. 1128a -b(13), 1320a-3, a-3a, a-5, a-7, 1395cc, vv,
				1396b, d, m, n, 2000d
NECESSITY, FUNCTION, AND CONFORMITY: EO 2004-726, effective
				July 9, 2004, reorganized the Cabinet for Health Services and placed the
				Department for Medicaid Services and the Medicaid Program under the Cabinet for
				Health and Family Services. The Cabinet for Health and Family Services,
				Department for Medicaid Services, has responsibility to administer the Medicaid
				Program.
				KRS
				205.8451 through
				205.990,
				205.624
				and
				194A.515
				provide that the Cabinet for Health Services and the Department for Medicaid
				Services shall be responsible for the control of Medicaid provider fraud and
				abuse.
				KRS
				205.520(3) authorizes the
				cabinet, by administrative regulation, to comply with a requirement that may be
				imposed or opportunity presented by federal law for the provision of medical
				assistance to Kentucky's indigent citizenry. This administrative regulation
				establishes the provisions relating to Medicaid provider participation,
				withholding overpayments, appeal process and sanctions.
Section 1. Definitions.
(1) "Abuse" means provider abuse or recipient
			 abuse as defined by
			 KRS
			 205.8451(8) and
			 (10).
(2) "Active provider number" means the
			 provider billing number issued by the department, or its fiscal agent, to a
			 provider that has presented to the department, or its fiscal agent, a Medicaid
			 claim for a supply or covered service for payment under that number during the
			 period of the previous twelve (12) consecutive months.
(3) "Adequate access" means pursuant to 42
			 CFR 1396a(8) all individuals wishing to make application for medical assistance
			 under the Medicaid Program shall have an opportunity to do so, and that
			 assistance shall be furnished with reasonable promptness to all eligible
			 individuals.
(4) "Administrative
			 appeal process" means an initial written request for redress setting forth the
			 issues in dispute, dispute resolution meeting, review of documentation,
			 prehearing, administrative hearing, recommended order, final order and all
			 deliberations or exchange of documents or information between a provider and
			 the department in accordance with KRS Chapter 13B.
(5) "Affiliate" means an individual agency or
			 organization controlled by a provider or associated with a provider under
			 common ownership or control.
(6)
			 "Applicant" means an individual, agency, entity, or organization that submits
			 an application to become a Medicaid provider.
(7) "Application" means the completion and
			 submission of a Medicaid provider agreement and all required addendum and
			 documentation specific to a provider type, which is the contract between the
			 provider and the department for the provision of Medicaid services.
(8) "Billing agent" means an individual,
			 agency, entity or organization that is authorized by a provider to prepare and
			 submit claims on behalf of a provider to the department, or its fiscal
			 agent.
(9) "Bribes and kickbacks"
			 means soliciting or receiving payment, or offering or making payment whether in
			 cash or goods or services, in return for:
(a)
			 Referring a recipient to a provider for medical care, services or supplies;
			 or
(b) Purchasing, leasing,
			 ordering or recommending medical care, services or supplies, for which payment
			 is claimed under the Medicaid Program.
(10) "Cabinet" means the Cabinet for Health
			 and Family Services.
(11) "Claim"
			 means a manually-created paper, or a computer-based electronically-created and
			 transmitted request for payment under the Medicaid Program that relates to each
			 individual billing submitted by a provider, or their billing agent, to the
			 department which details services rendered to a recipient on a specific date. A
			 claim may be either a line item of service or multiple services for one (1)
			 recipient on a bill.
(12)
			 "Conversion" means converting a Medicaid payment, or a part of a payment, to a
			 use or benefit other than for the use and benefit intended by the Medicaid
			 Program.
(13) "Convicted" means as
			 defined in
			 KRS
			 205.8475.
(14) "Demand letter" means correspondence to
			 an active or inactive provider stating a dollar amount is owed the program and
			 shall be paid by a given date.
(15)
			 "Department" means the Department for Medicaid Services and its designated
			 agents.
(16) "Disclosing entity"
			 means a Medicaid provider or the fiscal agent for the department.
(17) "Disclosure" means the provision of
			 information in accordance with the requirements established in 42 CFR 455,
			 Subpart B.
(18) "Exclusion" means
			 the termination of the participation of a provider or the denial of the
			 enrollment of a provider.
(19)
			 "Factor" means as defined in
			 42 CFR
			 447.10.
(20) "False claim" means a claim for:
(a) Unfurnished medical care, services, or
			 supplies; or
(b) Medical care,
			 services, or supplies provided:
1. In excess
			 of accepted standards of practice for the medical care or other type of
			 service;
2. In excess of
			 established limits which were communicated, in writing, to providers by the
			 department; or
3. If there is
			 documentation that the provider has knowledge of third-party coverage of the
			 recipient, but the provider knowingly chooses not to bill the third-party
			 payer.
(21)
			 "Fiscal agent" means a contractor that processes or pays provider claims on
			 behalf of the department.
(22)
			 "Full investigation" means the activities of Kentucky's Medicaid Fraud and
			 Abuse Control Unit of the Office of the Attorney General (MFACU) or other law
			 enforcement or investigative agency having authority to resolve a complaint of
			 Medicaid fraud or abuse.
(23)
			 "Furnish" means to provide medical care, services, or supplies that are:
(a) Provided directly by a
			 provider;
(b) Provided under the
			 supervision of a provider; or
(c)
			 Prescribed by a provider.
(24) "Inactive provider number" means the
			 provider billing number issued by the department, or its fiscal agent, to a
			 provider that failed to present a Medicaid claim for medical care, services, or
			 supplies for payment under that number to the department, or its fiscal agent,
			 during the period of the previous twelve (12) consecutive months;
(25) "Interest" means the prime interest rate
			 that is:
(a) Charged as a simple interest by
			 banks rounded to the nearest full percent, as quoted by commercial banks to
			 large business, as determined by the board of governors of the Federal Reserve
			 System; and
(b) In effect on the
			 close of business, July 1, which is the first day of the state fiscal
			 year.
(26) "Knowingly"
			 means as defined in
			 KRS
			 205.8451(5).
(27) "Managing employee" means a general
			 manager, business manager, administrator, director, or other individual who
			 exercises operational or managerial control over, or who conducts the day-today
			 operation of, an institution, entity, organization, or agency.
(28) "Material omission" means a failure by a
			 provider to report or advise the department of any fact, that if known to the
			 department, would have caused the department to deny, reduce, or otherwise
			 withhold any portion of reimbursement for a billed covered service.
(29) "Medicaid Fraud and Abuse Control Unit"
			 or "MFACU" means a unit in the Office of the Attorney General of Kentucky,
			 certified under the provisions of
			 42 U.S.C.
			 1396b(q), that conducts a
			 statewide program for the investigation and prosecution of violations of state
			 laws regarding fraud and abuse in connection with the Medicaid
			 Program.
(30) "Preliminary
			 investigation" means the activities of the Office of Inspector General (OIG),
			 MFACU, or the department to determine whether a complaint of Medicaid fraud or
			 abuse has sufficient basis to warrant a full investigation.
(31) "Program" means the state Medicaid
			 Program as defined by
			 42 U.S.C.
			 1396a.
(32) "Provider" means as defined by
			 KRS
			 205.8451(7).
(33) "Recipient" means as defined by
			 KRS
			 205.8451(9).
(34) "Reliable evidence" means:
(a) A preliminary determination based upon a
			 preponderance of evidence as verified by the department by audit, of
			 unacceptable practices or significant overpayments;
(b) Information of an ongoing investigation
			 of a provider based on a preponderance of evidence, as verified by the
			 department, involving fraud or criminal conduct pertaining to the Medicaid
			 Program;
(c) Information based on a
			 preponderance of evidence, as verified by the department, from a state
			 professional medical licensing or certifying agency of an ongoing investigation
			 of a Medicaid provider involving fraud, abuse, professional misconduct,
			 unprofessional conduct, or utilization; or
(d) Information from the department or other
			 sources based on a preponderance of evidence regarding unacceptable practices,
			 relevant past criminal activities or program abuse.
(35) "Sanction" means an administrative
			 action taken by the department which limits or bars an individual's, agency's,
			 entity's, or organization's participation in the Medicaid Program or imposes a
			 fiscal penalty against the provider, including the imposition of civil
			 penalties, or interest imposed at the department's discretion, or the
			 withholding of future payments.
(36) "Service" or "services" means a supply,
			 covered care or covered service under the Medicaid Program.
(37) "Subcontractor" means an individual,
			 agency, entity, or organization to which a disclosing entity has:
(a) Contracted or delegated some of its
			 management functions or responsibilities of providing medical care or services
			 to its patients; or
(b) Entered
			 into a contract, agreement, purchase order or lease including real property, to
			 obtain space, supplies, equipment or nonmedical services associated with
			 providing services and supplies that are covered under the Medicaid
			 Program.
(38) "Supplier"
			 means an individual, agency, entity, or organization from which a provider
			 purchases goods or services used in carrying out its responsibilities under the
			 Medicaid Program.
(39) "Terminated"
			 means a provider's participation in the Medicaid Program has been ended, and
			 that a contractual relationship no longer exists between a provider and the
			 department for the provision of Medicaid covered services to Medicaid eligible
			 recipients by that individual, agency, entity, organization, fiscal agents or
			 subcontractors of the provider.
(40) "Unacceptable practice" means conduct by
			 a provider which constitutes "fraud" or "provider abuse", as defined in
			 KRS
			 205.8451(2) or (8), or
			 willful misrepresentation, and includes the following practices:
(a) Knowingly submitting, or causing the
			 submission of false claims, or inducing, or seeking to induce, a person to
			 submit false claims;
(b) Knowingly
			 making, or causing to be made, or inducing, or seeking to induce, a false,
			 fictitious or fraudulent statement or misrepresentation of material fact in
			 claiming a Medicaid payment, or for use in determining the right to
			 payment;
(c) Having knowledge of an
			 event that affects the right of a provider to receive payment and concealing or
			 failing to disclose the event or other material omission with the intention
			 that a payment be made or the payment is made in a greater amount than
			 otherwise owed;
(d)
			 Conversion;
(e) Soliciting or
			 accepting bribes or kickbacks;
(f)
			 Failing to maintain or to make available, for purposes of audit or
			 investigation, administrative and medical records necessary to fully disclose
			 the medical necessity for the nature and extent of the medical care, services
			 and supplies furnished, or to comply with other requirements established in
			 907 KAR 1:673,
			 Section 2;
(g) Knowingly submitting
			 a claim or accepting payment for medical care, services, or supplies furnished
			 by a provider who has been terminated or excluded from the program;
(h) Seeking or accepting additional payments,
			 for example, gifts, money, donations, or other consideration, in addition to
			 the amount paid or payable under the Medicaid Program for covered medical care,
			 services, or supplies for which a claim is made;
(i) Charging or agreeing to charge or collect
			 a fee from a recipient for covered services which is in addition to amounts
			 paid by the Medicaid Program, except for required copayments or recipient
			 liability, if any, required by the Medicaid Program;
(j) Engaging in conspiracy, complicity, or
			 criminal syndication;
(k)
			 Furnishing medical care, services, or supplies that fail to meet professionally
			 recognized standards, or which are found to be noncompliant with licensure
			 standards promulgated under KRS Chapter 216B and failing to correct the
			 deficiencies or violation as reported to the department by the Office of
			 Inspector General, for health care or which are beyond the scope of the
			 provider's professional qualifications or licensure;
(l) Discriminating in the furnishing of
			 medical care, services, or supplies as prohibited by
			 42
			 U.S.C. 2000d;
(m) Having payments made to or through a
			 factor, either directly or by power of attorney, as prohibited by
			 42 CFR
			 447.10;
(n) Offering or providing a premium or
			 inducement to a recipient in return for the recipient's patronage of the
			 provider or other provider to receive medical care, services or supplies under
			 the Medicaid Program;
(o) Knowingly
			 failing to meet disclosure requirements;
(p) Unbundling as defined under subsection
			 (40) of this section; or
(q) An act
			 committed by a nonprovider on behalf of a provider which, if committed by a
			 provider, would result in the termination of the provider's enrollment in the
			 program.
(41)
			 "Unbundling" means submitting fragmented or multiple bills that results in a
			 higher total reimbursement for tests and services that were performed within a
			 specified time period that are required to be billed under a single bill code
			 pursuant to
			 42 U.S.C.
			 1396b, that mandates a provider utilize the
			 uniform identification coding system Current Procedural Terminology ("CPT")
			 that establishes the specific range of services that are to be billed as one
			 (1) CPT code.
(42) "Withholding"
			 means not paying a provider for claims which have been processed, pending the
			 results of an investigation of a report of fraud or willful misrepresentation
			 based upon receipt of reliable evidence or as a result of provider bankruptcy,
			 failure to submit timely cost reports, or closure or termination of a
			 business.