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Federal Register / Vol. 72, No.

41 / Friday, March 2, 2007 / Proposed Rules 9479

analysis and documentation under that DEPARTMENT OF HEALTH AND in this regulation to http://
section. HUMAN SERVICES Click
Under figure 2–1, paragraph (34)(h), on the link ‘‘Submit electronic
Centers for Medicare & Medicaid comments on CMS regulations with an
of the Instruction, an ‘‘Environmental
Services open comment period.’’ (Attachments
Analysis Check List’’ and a ‘‘Categorical
should be in Microsoft Word,
Exclusion Determination’’ are not 42 CFR Parts 405, 424, and 498 WordPerfect, or Excel; however, we
required for this rule. Comments on this
[CMS–6003–P2] prefer Microsoft Word.)
section will be considered before we 2. By regular mail. You may mail
make the final decision on whether to RIN 0938–AI49 written comments (one original and two
categorically exclude this rule from copies) to the following address ONLY:
further environmental review. Medicare Program; Appeals of CMS or Centers for Medicare & Medicaid
Contractor Determinations When a Services, Department of Health and
List of Subjects in 33 CFR Part 100 Provider or Supplier Fails To Meet the Human Services, Attention: CMS–6003–
Marine safety, Navigation (water), Requirements for Medicare Billing P2, P.O. Box 8017, Baltimore, MD
Reporting and recordkeeping Privileges 21244–1850.
requirements, Waterways. AGENCY: Centers for Medicare and Please allow sufficient time for mailed
Medicaid Services (CMS), HHS. comments to be received before the
For the reasons discussed in the close of the comment period.
preamble, the Coast Guard proposes to ACTION: Proposed rule.
3. By express or overnight mail. You
temporarily amend 33 CFR Part 100 as may send written comments (one
SUMMARY: This proposed rule would
follows: original and two copies) to the following
establish an appeals process for
providers and suppliers whose address ONLY:
PART 100—SAFETY OF LIFE ON Centers for Medicare & Medicaid
NAVIGABLE WATERS applications for enrollment or renewal
of enrollment were denied. It would Services, Department of Health and
also grant providers and suppliers the Human Services, Attention: CMS–6003–
1. The authority citation for Part 100 P2, Mail Stop C4–26–05, 7500 Security
continues to read as follows: right to a hearing by an Administrative
Law Judge (ALJ) within the Department Boulevard, Baltimore, MD 21244–1850.
Authority: 33 U.S.C. 1233; Department of of Health and Human Services after an 4. By hand or courier. If you prefer,
Homeland Security Delegation No. 0170.1. adverse decision at the reconsideration you may deliver (by hand or courier)
level when a provider or supplier’s your written comments (one original
2. In § 100.525, from 8 a.m. to 6 p.m. and two copies) before the close of the
on April 21 and 22, 2007, temporarily Medicare enrollment application is
denied to those situations in which the comment period to one of the following
suspend paragraph (c). addresses. If you intend to deliver your
provider or supplier’s Medicare billing
3. In § 100.525, from 8 a.m. to 6 p.m. privileges are revoked. In addition, this comments to the Baltimore address,
on April 21 and 22, 2007, temporarily proposed rule would grant providers please call telephone number (410)786–
add a new paragraph (d) to read as and suppliers the right to Departmental 7195 in advance to schedule your
follows: Appeals Board review of an adverse ALJ arrival with one of our staff members.
Room 445–G, Hubert H. Humphrey
§ 100.525 Western Branch, Elizabeth River, Building, 200 Independence Avenue,
It would also establish timeframes for
Portsmouth, Virginia. SW., Washington, DC 20201; or 7500
deciding enrollment appeals by an ALJ
* * * * * Security Boulevard, Baltimore, MD
or the DAB. This proposed rule would
(d) Enforcement period. This section also establish the use of electronic funds
(Because access to the interior of the
will be enforced from 8 a.m. to 6 p.m. transfer (EFT) be used for all Federal
HHH Building is not readily available to
on April 21 and 22, 2007. A notice of payments to providers and suppliers.
persons without Federal Government
enforcement of this section will be Finally, this proposed rule would
identification, commenters are
disseminated through the Fifth Coast implement section 936(b)(1) of the
encouraged to leave their comments in
Medicare Prescription Drug,
Guard District Local Notice to Mariners the CMS drop slots located in the main
Improvement, and Modernization Act of
announcing the specific event date and lobby of the building. A stamp-in clock
2003 (MMA), which specifies the
times. Notice will also be made via is available for persons wishing to retain
timeframes in which contractors must
marine Safety Radio Broadcast on VHF– a proof of filing by stamping in and
process all provider and supplier
FM marine band radio channel 22 retaining an extra copy of the comments
enrollment actions (initial enrollments,
(157.1 MHz). being filed.)
change of information actions, Comments mailed to the addresses
Dated: February 15, 2007. revalidations, etc.). indicated as appropriate for hand or
Larry L. Hereth, DATES: To be assured consideration, courier delivery may be delayed and
Rear Admiral, U.S. Coast Guard, Commander, comments must be received at one of received after the comment period.
Fifth Coast Guard District. the addresses provided below, no later Submission of comments on
[FR Doc. E7–3638 Filed 3–1–07; 8:45 am] than 5 p.m. on May 1, 2007. paperwork requirements. You may
BILLING CODE 4910–15–P ADDRESSES: In commenting, please refer submit comments on this document’s
to file code CMS–6003-P2. Because of paperwork requirements by mailing
staff and resource limitations, we cannot your comments to the addresses
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accept comments by facsimile (FAX) provided at the end of the ‘‘Collection

transmission. of Information Requirements’’ section in
You may submit comments in one of this document.
four ways (no duplicates, please): For information on viewing public
1. Electronically. You may submit comments, see the beginning of the
electronic comments on specific issues SUPPLEMENTARY INFORMATION section.

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9480 Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules

FOR FURTHER INFORMATION CONTACT: purposes of part 498, these suppliers the MMA. Whereas the ruling followed
August Nemec, (410) 786–0612. include independent laboratories; the procedures in § 405.874, this
SUPPLEMENTARY INFORMATION: suppliers of portable x-ray services; proposed rule would grant suppliers the
Submitting Comments: We welcome rural health clinics; federally qualified right, after denial or revocation of a
comments from the public on all issues health centers; ambulatory surgical supplier’s Medicare billing privileges, to
set forth in this rule to assist us in fully centers; end-stage renal disease a hearing by an ALJ after an adverse
considering issues and developing treatment facilities; and chiropractors decision at the reconsideration level as
policies. You can assist us by and physical therapists in private well as judicial review.
referencing the file code CMS–6003–P2. practice. For the purposes of Part 498,
the term ‘‘provider’’ refers to a hospital, II. Provisions of the Proposed Rule
Inspection of Public Comments: All
critical access hospital, skilled nursing Published on October 25, 1999
comments received before the close of
the comment period are available for facility, comprehensive outpatient In the October 25, 1999 Federal
viewing by the public, including any rehabilitation facility (CORF), home Register (64 FR 57431), we published a
personally identifiable or confidential health agency or hospice, that has in proposed rule that set forth proposed
business information that is included in effect an agreement to participate in revisions to § 405.874 (Appeals of
a comment. We post all comments Medicare; or a clinic, rehabilitation carrier decisions that supplier standards
received before the close of the agency, or pubic health agency that has are not met) to extend appeal rights to
comment period on the following Web in effect a similar agreement but only to all suppliers whose enrollment
site as soon as possible after they have furnish outpatient physical therapy or applications for Medicare billing
been received: speech pathology services; or privileges are revoked, except for those
eRulemaking. Click on the link community mental health center that suppliers covered under the appeals
‘‘Electronic Comments on CMS has in effect a similar agreement but provisions of part 498. The proposed
Regulations’’ on that Web site to view only to furnish partial hospitalization rule stated that these administrative
public comments. services. appeal rights would apply to suppliers
Comments received timely will also In addition, our regulations at of durable medical equipment,
be available for public inspection as § 405.874 provide an appeals process for prosthetics, orthotics, and supplies;
they are received, generally beginning suppliers of Durable Medical ambulance service providers;
approximately 3 weeks after publication Equipment, Prosthetics and Orthotics independent diagnostic testing facilities;
of a document, at the headquarters of and Supplies (DMEPOS) that wish to physicians; and other suppliers such as
the Centers for Medicare & Medicaid contest a denial of an application for a physician assistants. We also proposed
Services, 7500 Security Boulevard, billing number or the revocation of an revisions to the existing procedures in
Baltimore, Maryland 21244, Monday existing billing number. The § 405.874 § 405.874.
through Friday of each week from 8:30 appeals process affords DMEPOS Since section 902 of the Medicare
a.m. to 4 p.m. To schedule an suppliers the right to a carrier hearing Prescription Drug, Improvement, and
appointment to view public comments, before a carrier official who was not Modernization Act of 2003 (MMA)
phone 1–800–743–3951. involved in the original determination, prohibits the Secretary from finalizing a
and the right to seek a review before a proposed rule that was published more
I. Background CMS official designated by the CMS
A Medicare beneficiary may obtain than 3 years earlier except under
Administrator. exceptional circumstances, we are not
covered Medicare items or services from In December 1998, we issued CMS
any person, or institution that is seeking comment on our earlier
Ruling 98–1, regarding the appeals
enrolled in the Medicare program and is proposed rule. In addition, we have
process Medicare carriers must provide
qualified to furnish those services. to physicians, nonphysician revised the October 25, 1999 proposed
Various provisions of the statute and practitioners, and to certain entities that rule in order to comply with section 936
regulations establish conditions of receive reassigned benefits from of the MMA. However, we are including
participation or standards that a physicians and nonphysician a summary discussion of the significant
healthcare provider or supplier must practitioners. CMS Rulings are decisions provisions stated in the October 25,
meet in order to receive Medicare of the Administrator that serve as 1999 proposed rule in order to provide
payment. These standards differ precedent final opinions and orders and historical background regarding the
depending on the type of provider or statements of policy and interpretation. development of this proposed rule. The
supplier involved and whether the They provide clarification and following is a summary of the
services are furnished under Parts A, B, interpretation of complex or ambiguous procedural changes found in the
or C of the Medicare statute. There are provisions of statute or regulations October 25, 1999 proposed rule.
also differences in qualifications relating to Medicare, Medicaid, In our October 1999 proposed rule we
between providers and suppliers of Utilization and Quality Control Peer proposed to:
services, and differences among the Review, private health insurance, and • Set forth the procedures to be
various types of suppliers, in how they related matters. CMS Rulings are followed by carriers concerning
are enrolled in the Medicare program. binding on all our components, notifying a supplier of the denial of an
For some classifications of providers Medicare contractors, the Provider enrollment application for supplier
and suppliers, an on-site survey is Reimbursement Review Board, the billing privileges.
required. For other individuals or Medicare Geographic Classification • Clarify that a revocation of a
entities, a determination can be made Review Board, and ALJs who hear supplier billing number that is based on
based largely on the information Medicare appeals. These Rulings a Federal exclusion or debarment is
effective with the effective date of the
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provided by the applicant. promote consistency in interpretation of

The Medicare regulations in part 498 policy and adjudication of disputes. exclusion or debarment, regardless of
provide appeal rights for providers and This proposed rule is different from the the date of the notice from the carrier
suppliers that have been found to not clarification of appeals procedures that the billing number is revoked.
meet certain conditions of participation found in CMS Ruling 98–1, because it • Change the language in current
or established standards. For the adds provisions in order to comply with § 405.874(c) that requires a carrier

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Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules 9481

hearing officer to schedule a hearing to Comment: Two commenters suggested Providers and Suppliers to Establish
be held within 1 week. that carriers be given a timeframe for and Maintain Medicare enrollment final
• Clarify that we would not pay for processing these applications, such as rule (April 21, 2006, 71 FR 20754). In
services furnished by suppliers during a 30 or 45 days. Many commenters this final rule, we require providers and
period in which the supplier’s billing recommended that we maintain and supplier to meet and maintain all
privileges have been denied or revoked. enforce a time limit for the carrier to Federal and State requirements to be
• Clarify that the supplier must be in process enrollment applications and issued and retain Medicare billing
compliance with all requirements in expressed concern about delays in privileges. When suppliers enroll in the
order to have its billing number billing or the inability to bill for Medicare program, they are required to
reinstated, and that we must be satisfied Medicare items and services. sign a certification statement that they
that the supplier is in compliance and Response We do maintain and enforce are in compliance with all Medicare
will remain in compliance. provider enrollment processing enrollment requirements. This appeals
• Permit the carrier, carrier hearing standards for carriers. Currently, the proposed rule would not alter the
officer, or CMS (then HCFA) official to time limit for the carrier to process an burden of proof already placed on the
reopen and revise its initial initial determination, can be found in supplier in the initial application
determination Program Integrity Manual, Chapter 10- process.
• Restrict DMEPOS suppliers from Healthcare Provider/Supplier Comment: Two commenters suggested
billing for services prior to the date that Enrollment. Carriers are evaluated that we should propose a separate
their billing number was issued. against this standard in the Contractor enrollment process for those suppliers
Performance Evaluation process. whose enrollment applications have
• Describe the procedure for
In addition, section 936(a) of the been denied, who have lost their appeal,
submitting claims after a reversal of a MMA adds a new section 1866(j)(1)(B) and who decide to submit a new
supplier enrollment application denial to the Act, requiring the Secretary to enrollment application to the carrier.
or billing number revocation, or after a ‘‘* * * establish by regulation Response: We maintain that if a
billing number reinstatement. procedures under which there are supplier’s enrollment application has
III. Analysis of and Responses to Public deadlines for actions on applications for been denied and the denial was upheld
Comments Received From the Proposed enrollment (and, if applicable, renewal by the appeals process, then that
Rule Published on October 25, 1999 of enrollment). The Secretary shall supplier would still be eligible to
monitor the performance of Medicare reapply for a Medicare supplier number.
The following is a summary of our Administrative Contractors in meeting If the supplier still wanted to enroll, we
comments and responses to the October the deadlines * * *’’ In this proposed assume that the supplier would correct
25, 1999 proposed rule. rule, we would establish deadlines for the reasons for the denial. The supplier
Notwithstanding the presentation of processing all provider and supplier would be required to submit the
these comments and responses, we are enrollment actions as discussed in enrollment application as an initial
only soliciting comments on this greater detail in section IV. of the enrollment. Therefore, a separate
proposed rule. preamble of this proposed rule. enrollment process for applicants who
Comment: One commenter suggested Comment: Several commenters were denied enrollment would not be
that we simplify the enrollment suggested that we should provide practical.
application (Form CMS 855) instead of temporary provider numbers during the Comment: A commenter stated that
removing the requirement that a carrier enrollment process to permit suppliers we had established the effective date for
must accept or reject an entity’s to submit claims for their provision of purposed for billing Medicare for
enrollment application for a billing items and services prior to receiving a DMEPOS services in a change of
number or request additional permanent supplier billing number. ownership (CHOW) situation to be ‘‘the
information within 15 days of the Response: Since the publication of the date of the actual change in ownership,
receipt of the enrollment application. October 25, 1999 proposed rule, we rather than the date of assignment of the
Response: Since the publication of published the Requirements for National Supplier Clearinghouse.’’
our October 25, 1999 proposed rule we Providers and Suppliers to Establish Response: We agree with the
have published several notices and Maintain Medicare enrollment final commenter. This is the current policy as
requesting public comment on the rule(71 FR 20754), where we required long as at the time of the CHOW, all
enrollment applications in the Federal that providers and suppliers obtain CMS Medicare DMEPOS supplier
Register including one on February 2, billing numbers before enrolling in the standards specified in § 424.57 are met.
2001, (66 FR 8807). The final approval Medicare program. The purpose of the Comment: Three commenters stated
notice was granted on September 25, enrollment process is to ensure that we that physicians should not be
2001. Most recently, we sought public enroll qualified, eligible individuals and characterized as suppliers.
comments on our revised provider entities as providers and suppliers of Response: For purposes of Medicare
enrollment application on July 8, 2005. Medicare services. Allowing providers terminology, it has been a longstanding
In the April 25, 2003 Federal Register and suppliers to submit claims prior to practice for physicians to be considered
(68 FR 22064), we published a proposed enrollment in the Medicare program as suppliers. Our regulations at
rule concerning our provider enrollment would undermine this process. § 400.202 define a supplier as a
procedures entitled ‘‘Requirements for Comment: Two commenters suggested physician or other practitioner, or an
Establishing and Maintaining Medicare that a supplier should not have to prove entity other than a provider that
Billing Privileges,’’ that includes compliance with all enrollment furnishes health care services under
proposed revisions to the CMS 855 qualifications because this allows the Medicare. In addition, section 901(b) of
enrollment applications. In addition, to the MMA amended section 1861 of the
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carrier to raise new objections without

be consistent with the nomenclature in warning and shifts the burden of proof Act by adding paragraph (d), which
this proposed rule and existing manual to the supplier. defines a supplier to include a
instructions, we are changing the term Response: Since the publication of the physician. Therefore, we are retaining
‘‘disallowance’’ to the term ‘‘denial’’ October 25, 1999 proposed rule, we the current definition for the purpose of
throughout this proposed rule. published the Requirements for this proposed rule.

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9482 Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules

Comment: A commenter stated that it have clarified the differences between a Response: The OIG sends an
is unclear whether this regulation denial of billing privileges and exclusion notice to the supplier and the
applies to physicians. revocation of billing privileges. In carrier at the same time explaining that
Response: This proposed rule would addition, we believe that only one the supplier is being excluded from
apply to physicians, as physicians are appeals process is necessary to resolve Medicare, Medicaid, and other Federal
considered suppliers in accordance with adverse administrative enrollment health care programs. The effective date
the definitions specified in § 400.202. decisions. of the exclusion is 20 days after the date
Comment: One commenter stated that Comment: One commenter stated that the notice is sent to the supplier and the
this regulation should have been the appeal rights of a supplier that has carrier (see § 1001.2002(b)). The carrier
incorporated into a rule that established been excluded by the OIG are more does not establish the date for the
requirements for obtaining and expansive than the appeal rights exclusion nor can the carrier alter the
maintaining Medicare billing privileges. contained in this regulation for a effective date of OIG exclusion.
Response: As stated previously, we supplier whose billing number has been Comment: One commenter stated that
finalized CMS–6002-F, Requirements revoked, since an excluded supplier the carrier should not have the
for Provider and Suppliers to Establish may request an Administrative Law discretion to implement a carrier
and Maintain Medicare Enrollment, on Judge (‘‘ALJ’’) hearing. hearing officer’s decision to deny or
April 21, 2006 (71 FR 20754). Response: This proposed rule reflects revoke a supplier billing number
Accordingly, we are not able to adopt the requirements of section 936(a) of the pending a possible appeal. This
this suggestion. MMA to grant the right to an ALJ commenter suggested that carriers be
Comment: A commenter suggested hearing, judicial review, and DAB required to decide within 15 days
that we add an exception to this rule for review to a revoked supplier. Therefore, whether to appeal a hearing officer’s
time periods during which a supplier is an excluded supplier would no longer reversal decision, and if the carrier
unaware of the debarment or exclusion have more expansive appeal rights. chooses not to appeal, then it must
of another entity with which it is doing Comment: Several commenters noted immediately implement the decision.
business. that § 405.874(a) should clearly state Response: In accordance with section
Response: While we understand this that the carrier should fully inform the 936(1)(b)(1) of the MMA, we propose to
comment, we believe that information supplier in detail as to why it has follow the process of part 498. These
on excluded or debarred entities is denied the supplier’s enrollment procedures have specific timeframes.
readily available to the public. For application or revoked the supplier’s Comment: Several commenters stated
example, the Office of Inspector enrollment. that an ALJ, rather than a CMS official,
General’s (OIG’s) Web site pages which Response: We agree with the
should conduct the appeal that follows
include the following: commenters. In this proposed rule, we
• OIG’s ‘‘List of Excluded Individuals the carrier hearing.
are proposing in § 405.874(a) and (b)
and Entities.’’ This list is commonly Response: Section 936(l)(b)(1) of the
that the carrier provide the reason why
referred to as the ‘‘OIG Sanction List’’ MMA provides for an ALJ hearing.
a supplier’s enrollment application was
for those parties excluded by the OIG Therefore, we are proposing to modify
denied or why its billing number was
from participation in the Medicare, our regulations to address this concern.
Medicaid, and all Federal health care Comment: Several commenters were Comment: One commenter stated that
programs (as defined in section 1128B(f) opposed to reducing the timeframe to when a revocation of a supplier billing
of the Act); file an appeal of a denial of an number is reversed upon appeal, the
• ‘‘List of Parties Excluded from enrollment application or the revocation supplier billing number should be
Federal Procurement and Non- of a Medicare billing number from 90 to reinstated to the date upon which the
procurement Programs,’’ known as the 60 days. revocation became effective.
‘‘GSA Debarment List’’, for those parties Response: We are proposing to follow Response: We agree. In this proposed
debarred, suspended or otherwise the longstanding processes of part 498, rule, we would revise § 405.874(d), to
excluded by other Federal agencies from which allow 60 days for filing an provide that in the case of a reversal of
participation in Federal procurement appeal. a revocation on appeal, a supplier
and nonprocurement programs and Comment: A few commenters billing number is reinstated back to the
activities. contended that we should accept a date that the revocation became
The aforementioned lists are in postmark as the reliable date to effective.
accordance with the Federal Acquisition determine when suppliers have learned Comment: One commenter suggested
and Streamlining Act of 1994, and with of a carrier decision to deny an that we should establish clear
the HHS Common Rule at 45 CFR part application or revoke Medicare billing guidelines as to when and why a carrier
76. The Web site for the OIG exclusion privileges. or a carrier hearing officer can reopen an
list can be found at http:// Response: We agree with the existing decision or determination, and and the Web site for commenters. We believe that another commenter suggested that
the debarment list can be found at § 498.22(b)(3), § 498.22(d), and § 498.40 reopening of decisions should be clearly address when we must accept a limited to situations where good cause
Comment: Two commenters suggested postmark as the reliable date to has been established and new and
that we should more clearly distinguish determine when suppliers have learned material evidence has been uncovered.
between those suppliers whose initial of a carrier decision to deny an Response: While we considered
enrollment applications had been application or revoke Medicare billing establishing a reopening process, we
denied and those whose enrollment had privileges. believe that the appeals process that
Comment: One commenter stated that would be established in this proposed
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been revoked.
Response: With the publication of it is confusing to base the revocation of rule affords providers and suppliers
Requirements for Provider and a billing number on the effective date of with sufficient protections. We would
Suppliers to Establish and Maintain the Federal action (exclusion or appreciate receiving additional public
Medicare Enrollment final rule (April debarment), regardless of the date of comments regarding the benefits
21, 2006, 71 FR 20754), we believe we notice from the carrier. associated with expanding on the

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Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules 9483

reopening process established in the term ‘‘Medicare billing number.’’ These various levels of appeal would
§ 498.30. (See the January 23, 2004 final rule (69 also apply to revocations of Medicare
Comment: One commenter stated that FR 3469) for more detailed information billing privileges.
the provisions relating to the rejection of regarding the NPI.) After In proposed § 405.874(b)(1), Notice of
claims fails to distinguish between implementation of the NPI, providers or revocation, we would clarify that if a
suppliers whose billing numbers have suppliers will have to obtain an NPI carrier revokes a supplier’s Medicare
been revoked and those whose before initiating enrollment in the billing privileges that the carrier must
enrollment applications are pending. Medicare program. Medicare will use notify the supplier by certified mail and
The commenter also was concerned that the NPI as the billing number. However, that the notice must include—(1) the
payments will be rejected only when a providers and suppliers must still enroll reason for the revocation in sufficient
supplier’s enrollment has been revoked with a fee-for-service contractor in order detail for the supplier to understand the
because a carrier’s rejection of claims to bill the Medicare program. Thus, the nature of its deficiencies; (2) the right to
affords no appeal rights. fee-for-service contractor will convey appeal in accordance with part 498 of
Response: It is true that the provision billing privileges. this chapter; (3) the address to which
that claims be rejected does not in fact, We propose to maintain § 405.874, the written appeal must be mailed.
distinguish between those suppliers which specifies provisions that would In proposed § 405.874(b)(2),
whose billing numbers are revoked and apply to certain suppliers as defined in Revocation of a supplier’s billing
those whose enrollment applications are § 405.802. privileges, we would separate the
pending. Claims are rejected when the In § 405.802, we propose to define procedures in existing § 405.874(a) and
supplier does not have valid billing prospective supplier and suppliers by § 405.874(b) because we believe the
privileges at the time that claims were specifying the provisions of § 405.874 language in the October 29, 1999
submitted. When a supplier’s that would apply. These suppliers proposed rule was not sufficiently clear.
application is approved and it is include an independent laboratory; In proposed § 405.874(b)(2), we clarify
assigned a billing number, these claims supplier of durable medical equipment, that a revocation of a supplier’s billing
may be resubmitted and paid prosthetics, orthotics, or supplies privileges that is based on a Federal
retroactively, except for DMEPOS (DMEPOS); ambulance service provider; exclusion or debarment is effective with
suppliers, who do not have retroactive independent diagnostic testing facility; the effective date of the exclusion or
billing privileges. In addition, we physician, other practitioner such as debarment, regardless of the date of the
maintain that claims are rejected for physician assistant; physical therapist notice from the carrier that the billing
those suppliers whose billing privileges in independent practice; clinical number is revoked. Moreover, if CMS,
are revoked so the contractor does not laboratories; supplier of portable x-ray or one of its designated contractors
have to hold the claims in its system services; rural health clinic (RHC); revokes Medicare billing privileges, we
indefinitely. Federally qualified health center would not revoke an individual or
Comment: Two commenters stated (FQHC); ambulatory surgical center organization’s NPI.
that we should ensure that all decisions (ASC); an entity approved by CMS to In proposed § 405.874(b)(3), Payment,
are reached and implemented prior to furnish outpatient diabetes self- we would revise this section to clarify
the claims expiration date, or the agency management training, or end-stage renal that suppliers are not paid for items or
should allow exceptions in disease (ESRD) treatment facility that is services furnished during a period in
circumstances when the timeframe to approved by CMS as meeting the which a supplier does not have billing
pay allowable claims has expired. conditions for coverage of its services, privileges or its billing privileges have
Response: The timely filing and prospective supplier means any of been revoked. Concerning DMEPOS
requirements for claims submission, as the listed entities that seek to be suppliers, section 1834(j)(1) of the Act
specified in § 424.44, are not affected by approved for coverage of its services states that, with the exception of
an enrollment application pending under Medicare. medical equipment and supplies
processing or by the appeal of the In new § 405.874(a), Denial of a furnished incident to a physician’s
Agency’s enrollment decision. As supplier enrollment application, we service, no payment may be made by
specified in § 405.874(i), if a supplier is propose that if a carrier denies a Medicare for items and supplies unless
successful in overturning its denial or supplier’s enrollment application, the the supplier has active Medicare billing
revocation, it has up to 1 year after the carrier must notify the supplier by privileges. We further propose that
reversal decision to file any claims for certified mail. The notice must include claims submitted to carriers for items or
items furnished during the overturned the following: (1) The reason for denial services furnished during a period of
period. in sufficient detail to allow the supplier supplier ineligibility are to be rejected
to understand the nature of its by the carrier, not denied.
IV. Provisions of This Proposed Rule deficiencies; (2) the right to appeal in In § 405.874(c)(1) Appeal rights, we
After consideration of the comments accordance with part 498; and (3) the propose that a supplier’s appeal rights
reviewed, analysis of specific issues, address to which the written appeal would follow the processes detailed in
and the provisions of section 936(l)(b)(1) must be mailed. part 498.
of the MMA we are modifying the We propose these changes to comply We are proposing to revise
October 25, 1999 proposed rule by with section 936(a)(2) of the MMA. Part § 405.874(d), Impact of reversal of
making clarifying and editorial changes, 498 of these regulations includes the carrier determination on claims
and revising the sections affected by right of a supplier to a reconsideration processing, to reflect that claims for
936(l)(b)(1) of the MMA. of a determination that it does not services furnished to Medicare
With the implementation of the qualify for Medicare billing privileges. beneficiaries during a period in which
National Provider Identifier (NPI) This reconsideration would be the supplier’s billing privileges were not
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(which is a standard unique identifier performed by a carrier hearing officer effective are rejected and not denied. If
for health care providers) scheduled for not involved in the original a provider or supplier is determined not
May 23, 2007, we believe that it is determination. Part 498 also grants to have qualified for billing privileges in
appropriate to propose use of the term suppliers the right to a hearing by an one period but qualified in another,
‘‘Medicare billing privileges’’ in lieu of ALJ, DAB review and judicial review. contractors process claims for services

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9484 Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules

furnished to beneficiaries during the to deny the supplier’s enrollment transition to EFT will help ensure that
period for which the provider or application. Claims are rejected for payments are made to the provider or
supplier was Medicare-qualified. services furnished before that effective supplier of services. Finally, in the
Subpart C of this part sets forth the date. event of a national disaster, such as
requirements for recovery of In § 405.874(g), Submission of claims, Hurricane Katrina, providers and
overpayments. The appeals process for we propose that a provider or supplier suppliers utilizing EFT would be
denied claims should not apply if a succeeding in having its enrollment ensured a continuity of payment. We are
provider or supplier does not have application denial or billing number proposing to revise § 424.545(a),
billing privileges. revocation reversed, or in having its provider and supplier appeal rights,
In § 405.874(d)(3), we propose that if billing number reinstated, may submit which was part of the April 21, 2006
a revocation of a provider’s or supplier’s claims to the carrier for services final rule (71 FR 20754), regarding the
billing privileges are reversed upon furnished during periods of Medicare Requirements for Providers and
appeal, the provider’s or supplier’s qualification, subject to the limitations Suppliers To Establish and Maintain
billing privileges are reinstated back to in § 424.44 of this chapter, regarding the Medicare Enrollment. The existing
the date that the revocation became timely filing of claims. If the claims provision states that a revocation of
effective. previously were filed timely but were billing privileges also results in the
Section 405.874(d)(4) would specify rejected, they would be considered filed termination of a corresponding provider
that if a denial of a provider’s or timely upon resubmission. Previously agreement. Therefore, we are proposing
supplier’s billing privileges is reversed denied claims for items or services to revise § 424.545(a) by—
upon appeal, then the appeal decision rendered during a period of denial or • Redesignating the first sentence of
establishes the date that the provider’s revocation may be resubmitted to CMS current paragraph(a) as the introductory
or supplier’s billing privileges will within 1 year after the date of text and revising that text to remove the
become effective. reinstatement or reversal. reference to part 405 subpart H.
We propose revising § 405.874(e), In § 424.510(d)(2)(iv) Submittal of • Redesignating the second sentence
Reinstatement of provider’s or electronic funds transfer (EFT) of current paragraph (a) as paragraph
supplier’s billing privileges following authorization form, we propose that at (a)(1)(i).
corrective action, to state that if a the time of enrollment, an enrollment • Adding paragraph (a)(1)(ii) to
provider or supplier completes a change request or revalidation, clarify that if a provider appeals both of
corrective action plan and provides providers and suppliers shall submit the these sanctions, then both matters will
sufficient evidence to the carrier that it CMS–588 form to receive payments via be resolved using a single appeals
has complied fully with the Medicare electronic funds transfer. process.
requirements, the carrier may reinstate Consistent with the authority found at • Redesignating the last sentence of
the supplier’s billing privileges. The 31 U.S.C. 3332(f)(1), all Federal current paragraph (a) as paragraph
carrier may pay for services furnished payments, including Medicare (a)(2).
on or after the effective date of the payments to providers and suppliers, We believe that our proposal (the
reinstatement. The effective date of the shall be made by electronic funds addition of paragraph (a)(1)(ii) is not a
reinstatement will be based on the date transfer (EFT). Further, under 31 U.S.C. change from the current regulatory
the provider or supplier is in full 3332(g), each recipient of Federal provision. In fact, the current provision
compliance with all Medicare payments required to be made by in § 424.545(a) provides that a final
requirements. However, a carrier’s electronic funds transfer shall designate decision would apply both to the
refusal to reinstate billing privileges 1 or more financial institutions or other revocation and the termination.
based on the submission of a corrective authorized agents to which the However, this proposal is an effort to
action plan is not an initial payments shall be made and provide the clarify that a provider will be able to
determination and may not be appealed. information to CMS. While the statutory appeal both sanctions using one appeals
We believe that allowing suppliers to provisions at 31 CFR part 208 govern process. We also are proposing that this
appeal an adverse corrective action plan the Department of Treasury, they apply process would follow the appeals
would establish two separate appeal to all Federal government agencies. procedures established for revocations.
processes and result in an Consequently, we want to clarify that We believe that a single appeals process
administratively inefficient appeals the EFT requirement applies to would result in less administrative
process. Any supplier seeking to appeal providers and suppliers enrolling in the burden for both the agency and any
a carrier’s determination to deny or Medicare program or making changes to affected provider.
revoked billing privileges must submit enrollment. We are proposing to require We are proposing to add § 405.874(h)
an appeal within the timely filing the EFT payments for—(1) providers to establish deadlines for the
period established for reconsideration, and suppliers initially enrolling in the adjudication of provider enrollment
regardless of the submission of a Medicare program; and (2) providers actions. We are proposing that
corrective action plan. and suppliers submitting a CMS–855 contractors adjudicate initial
In § 405.874(f) we propose to revise change request who are not currently determinations and revalidations within
the effective date for DMEPOS receiving payments via EFT. Note if a 180 days of receipt and that carriers
supplier’s billing privileges. If a carrier, provider or supplier is not enrolled in adjudicate change-of-information and
carrier hearing officer, or ALJ the Medicare program or is not reassignment of payment request within
determines that a DMEPOS supplier’s submitting a change in their enrollment 90 days of receipt.
denied enrollment application meets the information, no action is necessary. We To assist the reader in understanding
standards in § 424.57 of this chapter and will continue to encourage all providers the provider enrollment appeals process
any other requirements that may apply discussed in this proposed rule, the
jlentini on PROD1PC65 with PROPOSAL

and suppliers to switch to EFT

(for example, reinstatement after an OIG payments voluntarily. chart below provides first the
exclusion), the determination We believe that this change will established timeframes in which a
establishes the effective date of the reduce the paperwork burden for the provider or supplier must file an appeal
billing number as not earlier than the public and reduce our administrative to an adverse determination (that is,
date the carrier made the determination costs. Moreover, we believe that the denial of billing privileges or revocation

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Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules 9485

of billing privileges), and second our appeals process is described in the

proposed adjudication timeframes. following preamble.
Additional information regarding the

Timeframe to maximum
Medicare provider enrollment determination file an appeal adjudication
(days) timeframe

Initial ......................................................................................................................................................................... 60 180

Reconsideration ....................................................................................................................................................... 60 60
Administrative Law Judge Review ........................................................................................................................... 60 180
Departmental Appeals Board Review ..................................................................................................................... 60 180
Federal District Court ............................................................................................................................................... N/A N/A

We are proposing to update these services could not be provider, supplier, delegated official or
§ 424.525(a)(1) and § 424.525(a)(2) for administered, or the equipment authorizing official be prohibited from
reasons for rejecting enrollment necessary for testing was not present enrolling for 3 years. We believe that
applications by reducing the amount of where the testing is said to have revocations are serious matters and
time that a provider or supplier must occurred. must be treated as such to maintain the
furnish complete information requested We do not believe the determination integrity of the program. We invite
by a contractor from 60 to 30 days. made by the CMS FFS contractors public comment on whether we should
Additionally, we are proposing a constitutes a determination of fraud. In consider different (that is, shorter or
reduction from 60 to 30 days for the addition we believe that this new longer) timeframes for prohibiting a
period allowed to furnish all supporting revocation authority is in line with provider or supplier from re-enrolling in
documentation for submitting their other revocations already used by CMS the Medicare program after a revocation
enrollment application. and its FFS contractors. Further, has been issued.
We are proposing to reject an providers and suppliers may appeal a Under the Medicare regulations, we
application that is submitted by a contractor revocation using the process know from experience that it is often the
provider or supplier if it is incomplete outlined in part 498. case that providers, and particularly
or if it fails to include all required We believe that this type of provision some suppliers, simply react to a
supporting documentation on the is essential to the efficient operation of termination from the program by
enrollment application within 30 days the Medicare program because it would turning around and immediately
of receipt. We are proposing this change enable us to take an important step in seeking reentry into the program,
because approximately 70 percent of the protecting the expenditure of public oftentimes in another location or with a
submitted applications are incomplete monies with respect to service providers different name. Such practices make a
or lack the supporting documents for whose motives and billing practices are sham of the enforcement process leaving
enrollment. This change will help questionable, at best, and, at worst, of a us with the obligation to constantly
facilitate the enrollment process and sort that might prompt an aggressive monitor suspect providers and
reduce the administrative burden response from the law enforcement suppliers, forcing the agency to stand by
associated with processing these community. The Medicare program while the same offenders engage in the
applications. ought not be forced to rely solely on its same noncompliant billing practices
We are also proposing to expand authority to deny claims on a piecemeal that led to their expulsion in the first
revocations by the addition of a basis while having to devote extensive place. We do not believe it is consistent
revocation for the abuse of billing resources to maintaining the kind of with our mandate to administer an
privileges to § 424.535. In the new close scrutiny of each of these providers efficient program or to protect the
§ 424.535(a)(8) we are proposing to and suppliers that would be required to expenditure of public monies by being
allow Medicare fee-for-service (FFS) minimize the program’s exposure to the compelled to take such a passive
contractors to revoke Medicare billing payment of claims that, by anyone’s approach to what are clearly
privileges when a provider or supplier definition, ought not be tolerated. For substandard practices. By having a
submits a claim or claims for services this reason, we are proposing this regulatory provision that would keep
that could not have been furnished to a provision in accordance with our broad such entities out of the program for 3
beneficiary. Specifically, we believe that rulemaking authorities in sections 1871 years, we believe we would be
it is both appropriate and necessary that and 1102 of the Act. establishing a credible deterrent to these
CMS’ FFS contractors be given the We should note that providers or substandard billing practices where
ability to revoke billing privileges when suppliers that expressly flag claims that providers and suppliers would know
services could not have been furnished they believe might be perceived by us as that there are real consequences to their
by a provider or supplier. We have being in this category would not face actions. The Medicare program ought
found numerous examples of situations prosecution under the False Claims Act. not have to choose to do business with
where a physician or other practitioner In the new § 424.535(c), we are all entities simply because they express
has billed for services furnished to proposing a timeframe to wait for their willingness to accept Federal
beneficiaries that are undeliverable, reapplication to the Medicare program payment for services that they have
including but not limited to situations when a provider or supplier is revoked.
jlentini on PROD1PC65 with PROPOSAL

demonstrated are too often suspicious or

where the beneficiary was deceased, the We are proposing that when a provider so poorly presented that they cause the
directing physician or beneficiary was or supplier, including all authorized program to devote too many resources to
not in the State or country when officials, delegating officials and determine their accuracy.
services were furnished, or when the practitioners, is revoked for any of the We are proposing to revise in
beneficiary was in another setting where reasons listed at § 424.535 that the § 498.1(g) in accordance with section

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9486 Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules

936(a)(2) of the MMA to provide an ALJ under the Department of Health and appellant or an administrative record
hearing, and judicial review for any Human Services. that is complete.
provider or supplier whose application With the proposed revision to In § 498.79, we are proposing that
for enrollment or reenrollment in § 405.874(c)(2), we want to clarify that when a request for an ALJ hearing is
Medicare has been denied. a provider or supplier is required to filed after CMS or a FFS contractor has
In § 498.2, we are proposing to revise prove that it is in compliance with all denied an enrollment application, that
the definition of a ‘‘supplier’’ to—(1) Medicare requirements for billing an ALJ must issue a decision, dismissal
include a supplier of durable medical privileges, and that the Medicare FFS order or remand to CMS, as appropriate,
equipment, prosthetics, orthotics, or contractor incorrectly denied or revoked no later than 180 days after the initial
supplies (DMEPOS); ambulance service the supplier’s billing number. request for a hearing.
provider; independent diagnostic testing Accordingly, we believe that the burden Finally, in § 498.88(g), we are
facility; physician; and other of proof is on the provider or supplier proposing that when a request for a
practitioner such as physician assistant; to show that it met all requirements Board review is filed after an ALJ has
and (2) remove the reference to upon application, or at the time of issued a decision or dismissal order,
‘‘prospective supplier.’’ In § 498.2, we revocation. In § 498.56, we are that the Board must issue a decision,
are also proposing to add a separate proposing to add a new paragraph (e) dismissal order or remand to the ALJ, as
definition of ‘‘prospective supplier.’’ We that specifies the ‘‘good cause’’ appropriate, no later than 180 days after
are removing the definition of the exception to the admission of new the appeal was received by the Board.
‘‘Office of Hearings and Appeals evidence at the ALJ and DAB appeal
(OHA)’’ because the function of this levels. V. Collection of Information
office has been moved from the Social Accordingly, we propose to revise Requirements
Security Administration to the § 498.56 and § 498.86 to prohibit Under the Paperwork Reduction Act
Department of Health and Human providers and suppliers from submitting of 1995 (PRA), agencies are required to
Services. We are also proposing to new provider enrollment issues or provide a 60-day notice in the Federal
revise the definition of ‘‘affected party’’ evidence at the ALJ and DAB levels of Register and solicit public comment
to specify that it includes CMS or a CMS review. We believe that the efficiency before a collection of information
contractor. and accuracy of the appeals process is requirement is submitted to the Office of
We are proposing to revise § 498.5 by enhanced when the provider or supplier Management and Budget (OMB) for
adding a new paragraph (l) to clarify the submits all necessary documentation review and approval. In order to fairly
administrative process that a with their appeal request to prove that evaluate whether an information
prospective provider, existing provider, they are in compliance with all collection should be approved by OMB,
prospective supplier or existing supplier Medicare requirements for enrollment. section 3506(c)(2)(A) of the PRA
dissatisfied with an initial If supporting evidence is not submitted requires that we solicit comments on the
determination or revised initial with the request for a reconsideration, following issues:
determination related to the denial or the contractor will contact the supplier • Whether the information collection
revocation of Medicare billing privileges to try to obtain the missing evidence. is necessary and useful to carry out the
would use. The contractor must make a decision proper functions of the agency;
We are proposing to revise based on the information in the case • The accuracy of the agency’s
§ 498.5(f)(2) to be consistent with the file. estimate of the information collection
change in § 498.1(g). This would The contractor may accept any burden;
implement the mandate of section additional documentation, even if it is • The quality, utility, and clarity of
936(a)(2) of the MMA regarding judicial not specified in the appeal notice. If the the information to be collected; and
review. We are proposing these provider/supplier fails to submit • Recommendations to minimize the
standards because the FFS contractors evidence before the reviewing official information collection burden on the
need sufficient time to adjudicate the issues its decision, the provider/ affected public, including automated
facts and make a reasoned decision. supplier would be precluded from collection techniques. However, we
Moreover, while we are establishing an introducing the evidence at higher believe the information collection
outside limit for processing these levels of the appeals process. It is activities referenced in § 405.874 are
applications, the vast majority of these presumed that the Medicare FFS exempt under the terms of the PRA for
decisions are made within 120 days. We contractor made a reasonable the following reasons:
are requesting comment on this existing determination in its denial or revocation • As defined in 5 CFR 1320.4(a)(2),
standard. of a supplier’s billing privileges based information collections conducted or
We are proposing to revise § 498.22(a) on information it had at the time of the sponsored during the conduct of
to add that we have delegated authority decision. The provider/supplier would criminal or civil action, or during the
to our contractors to reconsider an be required to furnish the evidence that conduct of an administrative action,
initial determination. We are also clearly shows the determination was in investigation, or audit involving an
proposing to revise § 498.22(b)(1) to error at the time it was made. agency against specific individuals or
state that a reconsideration request is to We are proposing to revise § 498.78(a) entities are exempt from the PRA.
be filed with CMS or with the State to delete the provision that an affected • As described in 5 CFR 1320.3(h)(9),
survey agency, or, in the case of party concur in writing or on the record facts or opinions obtained or solicited
prospective suppliers, the entity with a CMS or Office of Inspector through nonstandardized follow-up
specified in the notice of initial General (OIG) request for remand. We questions designed to clarify responses
determination. We are proposing to believe that the appeals process can be to approved collections, are exempt
revise § 498.44 to remove the term enhanced by allowing an ALJ to remand
jlentini on PROD1PC65 with PROPOSAL

from the PRA; and

Associate Commissioner for Hearings a provider enrollment case to the • Nonstandardized information
and Appeals, and we are replacing it Medicare FFS contractor when CMS collections directed to less than 10
with the Secretary, because this requests a remand. Further, we believe persons do not constitute information
function is no longer under the Social that a remand request could result in collections as outlined in 5 CFR
Security Administration; it is now either a favorable decision to the 1320.3(c).

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Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules 9487

We believe that the collection small entities include small businesses, any 1 year by State, local, or tribal
requirements are part of the nonprofit organizations, and governments, in the aggregate, or by the
administrative process, and collected in government agencies. Most hospitals private sector, of $120 million. This rule
a nonstandardized manner. Since each and most other providers and suppliers does not mandate expenditures by
case will be different, based on the are small entities, either by nonprofit either the governments mentioned or
reasons for denial or revocation, and status or by having revenues of $6 to the private sector, therefore no analysis
evidence presented, they fall under $29 million in any one year. Individuals is required.
these exceptions. and States are not included in the Executive Order 13132 establishes
If you comment on any of these definition of a small entity. We are not certain requirements that an agency
information collection and preparing an analysis for the RFA must meet when it promulgates a
recordkeeping requirements, please mail because we have determined that this proposed rule (and subsequent final
copies directly to the following: rule will not have a significant rule) that imposes substantial direct
Centers for Medicare and Medicaid economic impact on a substantial requirement costs on State and local
Services, Office of Strategic Operations number of small entities. governments, preempts State law, or
and Regulatory Affairs, Regulations We maintain that this proposed rule otherwise has Federalism implications.
Development Group, Attn.: William would not have an adverse impact on Since this regulation does not impose
Parham, CMS–6003–P2, Room C4–26– small entities; in fact, it would afford any costs on State or local governments,
05, 7500 Security Boulevard, Baltimore, small suppliers a measure of protection the requirements of E.O 13132 are not
MD 21244–1850; and Office of against adverse actions by us, and applicable.
Information and Regulatory Affairs, extend protection to a larger group of In accordance with the provisions of
Office of Management and Budget, suppliers beyond the DMEPOS Executive Order 12866, this regulation
Room 10235, New Executive Office suppliers currently covered under was reviewed by the Office of
Building, Washington, DC 20503. Attn.: § 405.874. Because this proposed rule Management and Budget.
Carolyn Lovett, CMS Desk Officer, would merely clarify, expand, and
CMS–6003–P2, update our current policy and Lists of Subjects Fax (202) administrative appeal rights, we 42 CFR Part 405
395–6974. anticipate slight, if any, economic Administrative practice and
impact on small entities.
VI. Response to Comments procedure, Health facilities, Health
According to data submitted to us by
Because of the large number of public professions, Kidney diseases, Medical
carriers in calendar year 2003,
comments we normally receive on approximately 166,500 enrollment devices, Medicare, Reporting and
Federal Register documents, we are not applications were submitted to the recordkeeping requirements, Rural
able to acknowledge or respond to them Medicare carriers by suppliers seeking areas, X-rays.
individually. We will consider all to receive billing privileges. We believe 42 CFR Part 424
comments we receive by the date and that a vast majority of these applicants Emergency medical services, Health
time specified in the DATES section of were small businesses. Of those facilities, Health professions, Medicare,
this preamble, and, when we proceed applications, approximately 2,000 were Reporting and recordkeeping
with a subsequent document, we will denied, and approximately 200 requirements.
respond to the comments in the applicants requested a reconsideration.
preamble to that document. Because we have already granted appeal 42 CFR Part 498
rights to the affected suppliers via Administrative practice and
VII. Regulatory Impact Statement instructions to carriers, we estimate that procedure, Health facilities, Health
We have examined the impact of this this regulation would have minimal professions, Medicare, Reporting and
rule as required by Executive Order impact on carrier workloads. recordkeeping requirements.
12866 (September 1993, Regulatory In addition, section 1102(b) of the Act
For the reasons set forth in the
Planning and Review), the Regulatory requires us to prepare a regulatory
preamble, the Centers for Medicare &
Flexibility Act (RFA) (September 19, impact analysis if a rule may have a
Medicaid Services would amend 42 CFR
1980, Pub. L. 96–354), section 1102(b) of significant impact on the operations of
chapter IV as set forth below:
the Social Security Act, the Unfunded a substantial number of small rural
Mandates Reform Act of 1995 (Pub. L. hospitals. This analysis must conform to PART 405—FEDERAL HEALTH
104–4, and Executive Order 13132). the provisions of section 603 of the INSURANCE FOR THE AGED AND
Executive Order 12866 directs RFA. For purposes of section 1102(b) of DISABLED
agencies to assess all costs and benefits the Act, we define a small rural hospital
of available regulatory alternatives and, as a hospital that is located outside of 1. The authority citation for Part 405,
if regulation is necessary, to select a Metropolitan Statistical Area and has subpart H, continues to read as follows:
regulatory approaches that maximize fewer than 100 beds. We are not Authority: Secs. 1102, 1842(b)(3)(C),
net benefits (including potential preparing an analysis for section 1102(b) 1869(b), and 1871 of the Social Security Act
economic, environmental, public health of the Act because we have determined, (42 U.S.C. 1302, 1395u(b)(3)(C), 1395ff(b) and
and safety effects, distributive impacts; and we determined, that this proposed 1395hh).
and equity). A regulatory impact rule will not have a significant impact
analysis (RIA) must be prepared for on the operations of a substantial Subpart H—Appeals Under the
major rules with economically number of small rural hospitals. There Medicare Part B Program
significant effects ($100 million or more is no negative impact on the program or 2. Section 405.802 is revised by
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in any 1 year). This rule does not reach on small businesses. adding the definitions of ‘‘prospective
the economic threshold and thus is not Section 202 of the Unfunded supplier’’ and ‘‘supplier’’ in
considered a major rule. Mandates Reform Act of 1995 also alphabetical order to read as follows:
The RFA requires agencies to analyze requires that agencies assess anticipated
options for regulatory relief for small costs and benefits before issuing any § 405.802 Definitions.
businesses. For purposes of the RFA, rule that may result in expenditure in * * * * *

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9488 Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules

Prospective supplier means any of the by a supplier during a period in which are reinstated back to the date that the
listed entities specified in the definition a supplier does not have billing revocation became effective.
of supplier that seeks to be approved for privileges or its billing privileges are (4) If denial of a supplier’s billing
coverage of its services under Medicare. revoked. privileges is reversed upon appeal and
* * * * * (ii) Carriers do not pay for services becomes binding, then the appeal
Supplier means an independent furnished by the supplier beginning decision establishes the date that the
laboratory; supplier of durable medical with the effective date of a revocation. supplier’s billing privileges becomes
equipment, prosthetics, orthotics, or (iii) Medicare does not pay for items effective.
supplies (DMEPOS); ambulance service and supplies unless the supplier has a (e) Reinstatement of supplier billing
provider; independent diagnostic testing valid, active Medicare billing number. privilege following corrective action. If a
facility; physician or other practitioner (iv) Claims for items or services supplier completes a corrective action
such as physician assistant; physical furnished to Medicare beneficiaries after and provides sufficient evidence to the
therapist in independent practice; the effective date of the revocation are carrier that it has complied fully with
clinical laboratories; supplier of rejected. Rejections of claims because a the Medicare requirements, the carrier
portable X-ray services; rural health supplier does not have a valid billing may reinstate the supplier’s billing
clinic (RHC); Federally qualified health number may not be appealed by the privileges. The carrier may pay for
center (FQHC); ambulatory surgical supplier. Claims submitted to carriers services furnished on or after the
center (ASC); an entity approved by for items or services furnished during a effective date of the reinstatement. The
CMS to furnish outpatient diabetes self- period of supplier ineligibility are effective date is based on the date the
management training; or end-stage renal rejected by the carrier, and not denied supplier is in compliance with all
disease (ESRD) treatment facility that is by the carrier. Medicare requirements. A carrier’s
approved by CMS as meeting the (c) Appeal rights. (1) A provider or refusal to reinstate a supplier’s billing
conditions for coverage of its services. supplier may appeal the initial privileges based on a corrective action is
* * * * * determination to deny a provider or not an initial determination under part
3. Section 405.874 is revised to read supplier’s enrollment application, or if 498 of this chapter.
as follows: applicable, to revoke a current billing (f) Effective date for DMEPOS
number by following the procedures supplier’s billing privileges. If a carrier,
§ 405.874 Appeals of carrier specified in part 498 of this chapter. carrier hearing officer, or ALJ
determinations that a supplier fails to meet (2) The reconsideration of a determines that a DMEPOS supplier’s
the requirements for Medicare billing
determination to deny or revoke a denied enrollment application meets the
provider or supplier’s Medicare billing standards in § 424.57 of this chapter and
(a) Denial of a supplier enrollment privileges may be handled by a carrier any other requirements that may apply,
application. If a carrier denies a hearing officer not involved in the the determination establishes the
supplier’s enrollment application, the initial determination. effective date of the billing privileges as
carrier must notify the supplier by (3) Providers and suppliers have the not earlier than the date the carrier
certified mail. The notice must include opportunity to submit evidence related made the determination to deny the
the following: to the enrollment action. Providers and DMEPOS supplier’s enrollment
(1) The reason for the denial in application. Claims are rejected for
suppliers must, at the time of their
sufficient detail to allow the supplier to services furnished before that effective
request, submit all evidence that they
understand the nature of its date.
want to be considered.
(4) If supporting evidence is not (g) Submission of claims. A supplier
(2) The right to appeal in accordance
submitted with the appeal request, the succeeding in having its enrollment
with part 498 of this chapter.
(3) The address to which the written contractor contacts the provider or application denial or billing privileges
appeal must be mailed. supplier to try to obtain the evidence. revocation reversed in a binding
(b) Revocation of Medicare billing (5) If the provider or supplier fails to decision, or in having its billing
privileges. (1) Notice of revocation. If a submit this evidence before the privileges reinstated, may submit claims
carrier revokes a supplier’s Medicare contractor issues its decision, the to the carrier for services furnished
billing privileges, the carrier must notify provider or supplier is precluded from during periods of Medicare
the supplier by certified mail. The introducing new evidence at higher qualification, subject to the limitations
notice must include the following: levels of the appeals process. in § 424.44 of this chapter, regarding the
(i) The reason for the revocation in (d) Impact of reversal of carrier timely filing of claims. If the claims
sufficient detail for the supplier to determination on claims processing. previously were filed timely but were
understand the nature of its (1) Claims for services furnished to rejected, they are considered filed
deficiencies. Medicare beneficiaries during a period timely upon resubmission. Previously
(ii) The right to appeal in accordance in which the supplier billing privileges denied claims for items or services
with part 498 of this chapter. was not effective are rejected. rendered during a period of denial or
(iii) The address to which the written (2) If a supplier is determined not to revocation may be resubmitted to CMS
appeal must be mailed. have qualified for a billing privileges in within 1 year after the date of
(2) Revocation of a supplier’s billing one period but qualified in another, reinstatement or reversal.
privileges. The revocation of a supplier’s carriers process claims for services (h) Deadline for processing provider
billing privileges is effective 15 days furnished to beneficiaries during the enrollment initial determinations.
after the carrier mails the notice of its period for which the supplier was Contractors approve or deny complete
Medicare-qualified. Subpart C of this provider enrollment applications to
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determination to the supplier. A

revocation based on a Federal exclusion part sets forth the requirements for approval or denial within the following
or debarment is effective with the date recovery of overpayments. timeframes:
of the exclusion or debarment. (3) If a revocation of a supplier’s (1) Initial enrollments. Contractors
(3) Payment. (i) Medicare does not billing privilege is reversed upon process new enrollment applications
pay for any items or services furnished appeal, the supplier’s billing privileges within 180 days of receipt.

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(2) Revalidation of existing of submitting the enrollment successful in overturning a denial or

enrollments. Contractors process application. revocation, unpaid claims for services
revalidations within 180 days of receipt. * * * * * furnished during the overturned period
(3) Change-of-information and 7. Section 424.535 is amended by— may be resubmitted.
reassignment of payment request. A. Adding a new paragraph (a)(8). * * * * *
Contractors process change-of- B. Redesignating paragraphs (c)
information and reassignment of through (f) as paragraphs (d) through (g). PART 498—APPEALS PROCEDURES
payment requests within 90 days of C. Adding a new paragraph (c). FOR DETERMINATIONS THAT AFFECT
receipt. The addition and revision read as PARTICIPATION IN THE MEDICARE
MEDICARE PAYMENT § 424.535 Revocation of enrollment and
billing privileges from the Medicare
4. The authority citation for part 424 program. CERTAIN NFs IN THE MEDICAID
continues to read as follows: PROGRAM
* * * * *
Authority: Secs. 1102 and 1871 of the (a) * * *. 9. The authority citation for part 498
Social Security Act (42 U.S.C. 1302 and (8) Abuse of billing privileges. The continues to read as follows:
1395hh). provider or supplier submits a claim or
Authority: Secs. 1102 and 1871 of the
5. Section 424.510 is amended by claims for services that could not have Social Security Act (42 U.S.C. 1302 and
adding a new paragraphs (d)(2)(iv) and been furnished to a specific individual 1395hh).
(e) to read as follows: on the date of service. These instances
include but are not limited to situations Subpart A—General Provisions
§ 424.510 Requirements for enrolling in where the beneficiary is deceased, the
the Medicare program. directing physician or beneficiary is not 10. Section 498.1 is amended by
* * * * * in the State or country when services revising paragraph (g) to read as follows:
(d) were furnished, or when the equipment § 498.1 Statutory basis.
(2) * * * necessary for testing is not present
* * * * *
(iv) The revisions read as follows: where the testing is said to have
(g) Section 1866(j) of the Act provides
At the time of enrollment, an occurred.
for a hearing and judicial review for any
enrollment change request or * * * * * provider or supplier whose application
revalidation, providers and suppliers (c) Reapplying after revocation. After for enrollment or reenrollment in
must agree to receive Medicare a provider, supplier, delegated official Medicare is denied or whose billing
payments via EFT. In order to receive or authorizing official has had their privileges are revoked.
Medicare payments via EFT, providers billing privileges revoked, they must
and suppliers must submit the CMS–588 * * * * *
wait 3 years from the date of revocation
form. 11. Section 498.2 is amended by—
before they can reapply to participate in
A. Revising the definition of ‘‘affected
* * * * * the Medicare program.
(e) Providers and suppliers must—(1) * * * * * B. Removing the definition of ‘‘OHA’’.
Agree to receive Medicare payment via 8. Section 424.545 is amended by C. Adding in alphabetical order the
electronic funds transfer (EFT) at the revising paragraph (a) to read as follows: definition of ‘‘prospective supplier’’.
time of enrollment, revalidation or D. Revising the definition of
submission of an enrollment change § 424.545 Provider and supplier appeal
rights. ‘‘supplier’’.
request; and The addition and revisions read as
(2) Submit the CMS–588 form to (a) General. A provider or supplier
that is denied enrollment in the follows:
receive Medicare payment via electronic
funds transfer. Medicare program, or whose Medicare § 498.2 Definitions.
6. Section 424.525 is amended by— enrollment has been revoked may
* * * * *
A. Republishing paragraph (a) appeal CMS’ decision in accordance
Affected party means a provider,
introductory text. with part 498, subpart A of this chapter.
prospective provider, supplier,
B. Revising paragraphs (a)(1) and (1) Appeals resulting in the
prospective supplier, or practitioner that
(a)(2). termination of a provider agreement. (i)
is affected by an initial determination or
The revisions read as follows: When revocation of billing privileges
by any subsequent determination or
also results in the termination of a
§ 424.525 Rejection of a provider or
decision issued under this part, and
corresponding provider agreement, the
supplier’s enrollment application for ‘‘party’’ means the affected party or
provider may appeal CMS’ decision in
Medicare enrollment. CMS, as appropriate. For provider or
accordance with part 498 of this chapter
(a) Reasons for rejection. CMS may supplier enrollment appeals, an affected
with the final decision of the appeal
reject a provider or supplier’s party includes CMS or a CMS
applying to both the billing privileges
enrollment application for the following contractor.
and the provider agreement.
reasons: (ii) When a provider appeals the * * * * *
(1) The provider or supplier fails to revocation of billing privileges and the Prospective supplier means any of the
furnish complete information on the termination of its provider agreement, listed entities specified in the definition
provider/supplier enrollment there will be one appeals process which of supplier that seek to be approved for
application within 30 calendar days coverage of its services under Medicare.
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will address both matters. The appeal

from the date of the contractor request procedures for revocation of Medicare * * * * *
for the missing information. billing privileges will apply. Supplier means an independent
(2) The provider or supplier fails to (2) Payment of unpaid claims. laboratory; supplier of portable X-ray
furnish all required supporting Payment is not made during the appeals services, rural health clinic (RHC);
documentation within 30 calendar days process. If the provider or supplier is Federally qualified health center

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9490 Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules

(FQHC); ambulatory surgical center initial determination that affects a Examination of any new documentary
(ASC); a supplier of durable medical prospective provider or supplier, or a evidence. After a hearing is requested
equipment, prosthetics, orthotics, or hospital seeking to qualify to claim but before it is held, the ALJ will
supplies (DMEPOS); ambulance service payment for all emergency hospital examine any new documentary
provider; independent diagnostic testing services furnished in a calendar year, if evidence submitted to the ALJ by a
facility; physician or other practitioner the affected party files a written request provider or supplier to determine
such as physician assistant, physical in accordance with paragraphs (b) and whether the provider or supplier has
therapist in independent practice, (c) of this section. For denial or good cause for submitting the evidence
clinical laboratories, an entity approved revocation of enrollment, prospective for the first time at the ALJ level.
by CMS to furnish outpatient diabetes providers and suppliers and providers (2) Determining if good cause exists.
self-management training, or end-stage and suppliers have a right to An ALJ finds good cause, for example,
renal disease (ESRD) treatment facility reconsideration. when the new evidence is material to an
that is approved by CMS as meeting the (b) * * * issue addressed in the reconsideration
conditions for coverage of its services. (1) With CMS or with the State survey and that issue was not identified as a
12. Section 498.5 is amended by— agency, or in the case of prospective material issue before the
A. Revising paragraph (f)(2). supplier the entity specified in the reconsideration.
B. Adding a new paragraph (l). notice of initial determination; (3) If good cause does not exist. If the
The revision and addition read as * * * * * ALJ determines that there was not good
follows: cause for submitting the evidence for
Subpart D—Hearings the first time at the ALJ level, the ALJ
§ 498.5 Appeal rights.
14. Section 498.40 is amended by must exclude the evidence from the
* * * * * proceeding and may not consider it in
(f) * * * revising paragraph (a)(1) to read as
follows: reaching a decision.
(2) A supplier or prospective supplier (4) Notification to all parties. As soon
dissatisfied with an ALJ decision may § 498.40 Request for hearing. as possible, but no later than the start of
request Board review, and has a right to (a) * * * (1) An affected party the hearing, the ALJ must notify all
seek judicial review of the Board’s entitled to a hearing under § 498.5 may parties of any evidence that is excluded
decision. file a request for a hearing with the ALJ from the hearing.
* * * * * office identified in the determination 17. Section 498.78 is amended by
(l) Appeal rights related to provider letter. revising paragraph (a) to read as follows:
enrollment. * * * * *
(1) Any prospective provider, an § 498.78 Remand by the Administrative
15. Section 498.44 is revised to read Law Judge.
existing provider, prospective supplier as follows:
or existing supplier dissatisfied with an (a) If CMS requests remand, the ALJ
initial determination or revised initial § 498.44 Designation of hearing official. may remand any case properly before
determination related to the denial or (a) The Secretary or his or her him or her to CMS.
revocation of Medicare billing privileges delegate designates an ALJ or a member * * * * *
may request reconsideration in or members of the Board to conduct 18. A new § 498.79 is added to
accordance with § 498.22(a). hearings. subpart D to read as follows:
(2) CMS, a CMS contractor, any (b) If appropriate, the Secretary or the
prospective provider, an existing delegate may designate another ALJ or § 498.79 Timeframes for deciding an
another member or other members of enrollment appeal before an ALJ.
provider, prospective supplier or
existing supplier dissatisfied with a the Board to conduct the hearing. When a request for an ALJ hearing is
reconsidered determination under (c) As used in this part, ‘‘ALJ’’ filed after CMS or a FFS contractor has
paragraph (l)(1) of this section, or a includes any ALJ of the Department of denied an enrollment application, the
revised reconsidered determination Health and Human Services or members ALJ must issue a decision, dismissal
under § 498.30, is entitled to a hearing of the Board who are designated to order or remand to CMS, as appropriate,
before an ALJ. conduct a hearing. no later than the end of the 180-day
(3) CMS, a CMS contractor, any 16. Section 498.56 is amended by— period beginning from the date the
prospective provider, an existing A. Revising paragraph (a)(2). appeal was filed with an ALJ.
B. Adding a new paragraph (e).
provider, prospective supplier or The revision and addition read as
existing supplier dissatisfied with a Subpart E—Departmental Appeals
follows: Board Review
hearing decision may request Board
review, and any prospective provider, § 498.56 Hearing on new issues. 19. Section 498.86 is amended by
an existing provider, prospective * * * * * revising paragraph (a) to read as follows:
supplier, or existing supplier has a right (a) * * *
to seek judicial review of the Board’s (2) Except for provider or supplier § 498.86 Evidence admissible on review.
decision. enrollment appeals which are addressed (a) Except for provider or supplier
in § 498.56(e), the ALJ may consider enrollment appeals which are addressed
Subpart B—Initial, Reconsidered, and new issues even if CMS or the OIG has in § 498.56(e), the Board may admit
Revised Determinations not made initial or reconsidered evidence into the record in addition to
13. Section 498.22 is amended by determinations on them, and even if the evidence introduced at the ALJ
they arose after the request for hearing hearing (or the documents considered
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revising paragraphs (a) and (b)(1) to read

as follows: was filed or after the prehearing by the ALJ if the hearing was waived)
conference. if the Board considers that the
§ 498.22 Reconsideration. * * * * * additional evidence is relevant and
(a) Right to reconsideration. CMS or (e) Provider and supplier enrollment material to an issue before it.
one of its contractors reconsiders an appeals: Good cause requirement. (1) * * * * *

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Federal Register / Vol. 72, No. 41 / Friday, March 2, 2007 / Proposed Rules 9491

20. Section 498.88 is amended by percent confidence interval of +/-5.0 Columbia and Puerto Rico to report
adding a new paragraph (g) to read as percent. specified information regarding errors to
follows: DATES: Comment Period: You may the Department of Health and Human
submit comments through May 1, 2007. Services. The basic components of this
§ 498.88 Decision or remand by the error rate methodology, and how it was
Departmental Appeals Board. We will not consider comments
received after this date. developed and pilot tested, are
* * * * * described in this proposed rule. The
(g) When a request for Board review ADDRESSES: You may mail comments to
specifics of this methodology and how
is filed after an ALJ has issued a the Administration for Children and it will be implemented are detailed in
decision or dismissal order, the Board Families, Child Care Bureau, 1250 the information collection forms and
must issue a decision, dismissal order or Maryland Ave. SW., 8th Floor, instructions associated with this rule,
remand to the ALJ, as appropriate, no Washington, DC 20024. Attention: copies of which may be downloaded or
later than 180 days after the appeal was Christine Calpin, Associate Director. requested as detailed in the section
received by the Board. Commenters also may provide discussing the Paperwork Reduction Act
comments on the ACF website. To below.
(Catalog of Federal Domestic Assistance
Program No. 93.773, Medicare—Hospital transmit comments electronically, or to
Insurance Program; and No. 93.774, download an electronic version of the A. Child Care and Development Fund
Medicare—Supplementary Medical proposed rule, please go to http:// (CCDF)
Insurance Program.) We will have CCDF provides Federal funds to
Dated: August 30, 2005. comments available for public States, Territories, Indian Tribes and
inspection Monday through Friday, 8:30 tribal organizations for the purpose of
Mark B. McClellan,
a.m. to 5 p.m. at the above address. The assisting low-income families, including
Administrator, Centers for Medicare and
information collection related to this families receiving or transitioning from
Medicaid Services.
regulation can be found at http:// the Temporary Assistance for Needy
Dated: November 8, 2006. Families program (TANF), in the
Micheal O. Leavitt, ipi/ipi.htm. purchase of child care services, thereby
Secretary. FOR FURTHER INFORMATION CONTACT: Jeff allowing parents to work or attend job
[FR Doc. 07–870 Filed 2–23–07; 8:45 am] Polich, Child Care Program Specialist, training or an educational program.
BILLING CODE 4120–01–P Child Care Bureau, at (202) 205–8696, or States and Territories must spend a
by email at portion of their CCDF allotment on
SUPPLEMENTARY INFORMATION: expenditures to improve the quality and
DEPARTMENT OF HEALTH AND availability of child care. A principle
HUMAN SERVICES Table of Contents goal of CCDF set forth in Section 658A
I. Background of the Child Care and Development
Administration for Children and A. Child Care and Development Fund Block Grant (CCDBG) Act of 1990, as
Families B. Improper Payments amended (42 U.S.C. 9858, et seq.), is to
C. Statutory and Administrative Directives ‘‘Allow each State maximum flexibility
45 CFR Part 98 To Measure Improper Payments and in developing child care programs and
Calculate Error Rates policies that best suit the needs of
RIN 0970–AC29 D. Error Rate Methodology Pilots children and parents within such
E. Operationalizing the Error Rate State.’’ CCDF is provided only to States,
Child Care and Development Fund Methodology
Error Rate Reporting II. Statutory Authority
Territories and Tribes—there is no
III. Provisions of Proposed Rule provision for direct funding to
AGENCY: Administration for Children A. Summary of the Existing Regulations individual families or providers.
and Families (ACF), HHS. B. Consultation with States, Territories and Federal law establishes eligibility
ACTION: Notice of proposed rulemaking. Other Organizations criteria for families receiving CCDF
C. Changes Made in This Proposed Rule assistance; however, States and
SUMMARY: This proposed rule revises the D. Relation to Existing Regulations Territories administering CCDF funds
Child Care and Development Fund IV. Regulatory Impact Analyses may impose more restrictive eligibility
(CCDF) regulations to provide for the A. Executive Order 12866 standards. Regulations governing CCDF
reporting of error rates in the B. Regulatory Flexibility Analysis are codified in 45 CFR Parts 98 and 99,
expenditure of CCDF grant funds by the C. Assessment of the Impact on Family
and the Federal definition of a child’s
fifty States, the District of Columbia and D. Paperwork Reduction Act eligibility for child care services is set
Puerto Rico. The error rate reports will E. Unfunded Mandates Reform Act of 1995 forth in 45 CFR 98.20. This description
serve to implement provisions of the F. Congressional Review includes eligibility requirements related
Improper Payments Information Act of G. Executive Order 13132 to a child’s age, a child’s special needs
2002 (IPIA) and the President’s or protective services status, family
Management Agenda (PMA)’s goal of I. Background income and parent’s work, training or
‘‘Eliminating Improper Payments.’’ For This proposed rule adds a new educational activity. Lead Agencies of
reasons that will be explained in the subpart to the Child Care and the CCDF Program—which are the State,
preamble to the rule, the initial Development Fund (CCDF) regulations territorial or tribal entities to which
information collection under this that would require States, the District of CCDF block grants are awarded and that
proposed rule will require States, the Columbia and Puerto Rico to employ a are accountable for the use of the funds
District of Columbia, and Puerto Rico to case review process in calculating CCDF provided—have established policies and
jlentini on PROD1PC65 with PROPOSAL

review and report on a random sample error rates in accordance with an error procedures that vary considerably
of cases estimated to achieve the rate methodology established by the across and even within jurisdictions,
calculation of annual improper Secretary of Health and Human Services including, but not limited to, stricter
authorizations for payment (rather than (the Secretary). The proposed rule income limits, special eligibility or
improper payments made) with a 90 would require States, the District of priority for families receiving TANF and

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