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§ 455.1742 CFR Ch. IV (10–1–12 Edition)(b) The case is closed or dropped because of insufficient evidence to support the allegations of fraud or abuse;or(c) The matter is resolved betweenthe agency and the provider or beneficiary. This resolution may includebut is not limited to—(1) Sending a warning letter to theprovider or beneficiary, giving noticethat continuation of the activity inquestion will result in further action;(2) Suspending or terminating theprovider from participation in the Medicaid program;(3) Seeking recovery of paymentsmade to the provider; or(4) Imposing other sanctions providedunder the State plan.[43 FR 45262, Sept. 29, 1978, as amended at 48FR 3756, Jan. 27, 1983]§ 455.17 Reporting requirements.The agency must report the followingfraud or abuse information to the appropriate Department officials at intervals prescribed in instructions.(a) The number of complaints offraud and abuse made to the agencythat warrant preliminary investigation.(b) For each case of suspected provider fraud and abuse that warrants afull investigation—(1) The provider’s name and number;(2) The source of the complaint;(3) The type of provider;(4) The nature of the complaint;(5) The approximate range of dollarsinvolved; and(6) The legal and administrative disposition of the case, including actionstaken by law enforcement officials towhom the case has been referred.(Approved by the Office of Management andBudget under control number 0938–0076)[43 FR 45262, Sept. 29, 1978, as amended at 48FR 3756, Jan. 27, 1983]§ 455.18 Provider’sstatementsonclaims forms.(a) Except as provided in § 455.19, theagency must provide that all providerclaims forms be imprinted in boldfacetype with the following statements, orwith alternate wording that is approved by the Regional CMS Administrator:(1) ‘‘This is to certify that the foregoing information is true, accurate,and complete.’’(2) ‘‘I understand that payment ofthis claim will be from Federal andState funds, and that any falsification,or concealment of a material fact, maybe prosecuted under Federal and Statelaws.’’(b) The statements may be printedabove the claimant’s signature or, ifthey are printed on the reverse of theform, a reference to the statementsmust appear immediately precedingthe claimant’s signature.§ 455.19Provider’s statement on check.As an alternative to the statementsrequired in § 455.18, the agency mayprint the following wording above theclaimant’s endorsement on the reverseof checks or warrants payable to eachprovider: ‘‘I understand in endorsing ordepositing this check that paymentwill be from Federal and State fundsand that any falsification, or concealment of a material fact, may be prosecuted under Federal and State laws.’’§ 455.20 Beneficiary verification procedure.(a) The agency must have a methodfor verifying with beneficiaries whether services billed by providers were received.(b) In States receiving Federalmatching funds for a mechanizedclaims processing and information retrieval system under part 433, subpartC, of this subchapter, the agency mustprovide prompt written notice as required by § 433.116 (e) and (f).[48 FR 3756, Jan. 27, 1983, as amended at 56FR 8854, Mar. 1, 1991]§ 455.21 Cooperation with State Medicaid fraud control units.In a State with a Medicaid fraud control unit established and certifiedunder subpart C of this part,(a) The agency must—(1) Refer all cases of suspected provider fraud to the unit;(2) If the unit determines that it maybe useful in carrying out the unit’s responsibilities, promptly comply with arequest from the unit for—410VerDate Mar 15 201016:02 Nov 07, 2012Jkt 226187PO 00000Frm 00420Fmt 8010Sfmt 8010Q:\42\226187.XXXofr150PsN: PC150

Centers for Medicare & Medicaid Services, HHS(i) Access to, and free copies of, anyrecords or information kept by theagency or its contractors;(ii) Computerized data stored by theagency or its contractors. These datamust be supplied without charge and inthe form requested by the unit; and(iii) Access to any information keptby providers to which the agency is authorized access by section 1902(a)(27) ofthe Act and § 431.107 of this subchapter.In using this information, the unitmust protect the privacy rights ofbeneficiaries; and(3) On referral from the unit, initiateany available administrative or judicial action to recover improper payments to a provider.(b) The agency need not comply withspecific requirements under this subpart that are the same as the responsibilities placed on the unit under subpart D of this part.§ 455.23 Suspension of payments incases of fraud.(a) Basis for suspension. (1) The StateMedicaid agency must suspend all Medicaid payments to a provider after theagency determines there is a credibleallegation of fraud for which an investigation is pending under the Medicaidprogram against an individual or entity unless the agency has good cause tonot suspend payments or to suspendpayment only in part.(2) The State Medicaid agency maysuspend payments without first notifying the provider of its intention tosuspend such payments.(3) A provider may request, and mustbe granted, administrative reviewwhere State law so requires.(b) Notice of suspension. (1) The Stateagency must send notice of its suspension of program payments within thefollowing timeframes:(i) Five days of taking such actionunless requested in writing by a lawenforcement agency to temporarilywithhold such notice.(ii) Thirty days if requested by lawenforcement in writing to delay sending such notice, which request fordelay may be renewed in writing up totwice and in no event may exceed 90days.(2) The notice must include or address all of the following:§ 455.23(i) State that payments are beingsuspended in accordance with this provision.(ii) Set forth the general allegationsas to the nature of the suspension action, but need not disclose any specificinformation concerning an ongoing investigation.(iii) State that the suspension is for atemporary period, as stated in paragraph (c) of this section, and cite thecircumstances under which the suspension will be terminated.(iv) Specify, when applicable, towhich type or types of Medicaid claimsor business units of a provider suspension is effective.(v) Inform the provider of the rightto submit written evidence for consideration by State Medicaid Agency.(vi) Set forth the applicable State administrative appeals process and corresponding citations to State law.(c) Duration of suspension. (1) All suspension of payment actions under thissection will be temporary and will notcontinue after either of the following:(i) The agency or the prosecuting authorities determine that there is insufficient evidence of fraud by the provider.(ii) Legal proceedings related to theprovider’s alleged fraud are completed.(2) A State must document in writingthe termination of a suspension including, where applicable and appropriate,any appeal rights available to a provider.(d) Referrals to the Medicaid fraud control unit. (1) Whenever a State Medicaidagency investigation leads to the initiation of a payment suspension in wholeor part, the State Medicaid Agencymust make a fraud referral to either ofthe following:(i) To a Medicaid fraud control unitestablished and certified under part1007 of this title; or(ii) In States with no certified Medicaid fraud control unit, to an appropriate law enforcement agency.(2) The fraud referral made underparagraph (d)(1) of this section mustmeet all of the following requirements:(i) Be made in writing and providedto the Medicaid fraud control unit notlater than the next business day afterthe suspension is enacted.411VerDate Mar 15 201016:02 Nov 07, 2012Jkt 226187PO 00000Frm 00421Fmt 8010Sfmt 8010Q:\42\226187.XXXofr150PsN: PC150

§ 455.2342 CFR Ch. IV (10–1–12 Edition)(ii) Conform to fraud referral performance standards issued by the Secretary.(3)(i) If the Medicaid fraud controlunit or other law enforcement agencyaccepts the fraud referral for investigation, the payment suspension may becontinued until such time as the investigation and any associated enforcement proceedings are completed.(ii) On a quarterly basis, the Statemust request a certification from theMedicaid fraud control unit or otherlaw enforcement agency that any matter accepted on the basis of a referralcontinues to be under investigationthus warranting continuation of thesuspension.(4) If the Medicaid fraud control unitor other law enforcement agency declines to accept the fraud referral forinvestigation the payment suspensionmust be discontinued unless the StateMedicaid agency has alternative Federal or State authority by which itmay impose a suspension or makes afraud referral to another law enforcement agency. In that situation, theprovisions of paragraph (d)(3) of thissection apply equally to that referralas well.(5) A State’s decision to exercise thegood cause exceptions in paragraphs (e)or (f) of this section not to suspendpayments or to suspend payments onlyin part does not relieve the State of theobligation to refer any credible allegation of fraud as provided in paragraph(d)(1) of this section.(e) Good cause not to suspend payments. A State may find that goodcause exists not to suspend payments,or not to continue a payment suspension previously imposed, to an individual or entity against which there isan investigation of a credible allegation of fraud if any of the following areapplicable:(1) Law enforcement officials havespecifically requested that a paymentsuspension not be imposed becausesuch a payment suspension may compromise or jeopardize an investigation.(2) Other available remedies implemented by the State more effectivelyor quickly protect Medicaid funds.(3) The State determines, based uponthe submission of written evidence bythe individual or entity that is the sub-ject of the payment suspension, thatthe suspension should be removed.(4) beneficiary access to items orservices would be jeopardized by a payment suspension because of either ofthe following:(i) An individual or entity is the solecommunity physician or the solesource of essential specialized servicesin a community.(ii) The individual or entity serves alarge number of beneficiaries within aHRSA-designatedmedicallyunderserved area.(5) Law enforcement declines to certify that a matter continues to beunder investigation per the requirements of paragraph (d)(3) of this section.(6) The State determines that payment suspension is not in the best interests of the Medicaid program.(f) Good cause to suspend payment onlyin part. A State may find that goodcause exists to suspend payments inpart, or to convert a payment suspension previously imposed in whole toone only in part, to an individual or entity against which there is an investigation of a credible allegation offraud if any of the following are applicable:(1) beneficiary access to items orservices would be jeopardized by a payment suspension in whole or part because of either of the following:(i) An individual or entity is the solecommunity physician or the solesource of essential specialized servicesin a community.(ii) The individual or entity serves alarge number of beneficiaries within aHRSA-designatedmedicallyunderserved area.(2) The State determines, based uponthe submission of written evidence bythe individual or entity that is the subject of a whole payment suspension,that such suspension should be imposedonly in part.(3)(i) The credible allegation focusessolely and definitively on only a specific type of claim or arises from onlya specific business unit of a provider;and412VerDate Mar 15 201016:02 Nov 07, 2012Jkt 226187PO 00000Frm 00422Fmt 8010Sfmt 8010Q:\42\226187.XXXofr150PsN: PC150

Centers for Medicare & Medicaid Services, HHS(ii) The State determines and documents in writing that a payment suspension in part would effectively ensure that potentially fraudulent claimswere not continuing to be paid.(4) Law enforcement declines to certify that a matter continues to beunder investigation per the requirements of paragraph (d)(3) of this section.(5) The State determines that payment suspension only in part is in thebest interests of the Medicaid program.(g) Documentation and record retention. State Medicaid agencies mustmeet the following requirements:(1) Maintain for a minimum of 5years from the date of issuance all materials documenting the life cycle of apayment suspension that was imposedin whole or part, including the following:(i) All notices of suspension of payment in whole or part.(ii) All fraud referrals to the Medicaid fraud control unit or other lawenforcement agency.(iii) All quarterly certifications ofcontinuing investigation status by lawenforcement.(iv) All notices documenting the termination of a suspension.(2)(i) Maintain for a minimum of 5years from the date of issuance all materials documenting each instancewhere a payment suspension was notimposed, imposed only in part, or discontinued for good cause.(ii) This type of documentation mustinclude, at a minimum, detailed information on the basis for the existence ofthe good cause not to suspend payments, to suspend payments only inpart, or to discontinue a payment suspension and, where applicable, mustspecify how long the State anticipatessuch good cause will exist.(3) Annually report to the Secretarysummary information on each of following:(i) Suspension of payment, includingthe nature of the suspected fraud, thebasis for suspension, and the outcomeof the suspension.(ii) Situation in which the State determined good cause existed to not suspend payments, to suspend paymentsonly in part, or to discontinue a payment suspension as described in this§ 455.101section, including describing the nature of the suspected fraud and the nature of the good cause.[ 76 FR 5966, Feb. 2, 2011]Subpart B—Disclosure of Information by Providers and FiscalAgentsSOURCE: 44 FR 41644, July 17, 1979, unlessotherwise noted.§ 455.100Purpose.This subpart implements sections1124, 1126, 1902(a)(38), 1903(i)(2), and1903(n) of the Social Security Act. Itsets forth State plan requirements regarding—(a) Disclosure by providers and fiscalagents of ownership and control information; and(b) Disclosure of information on aprovider’s owners and other personsconvicted of criminal offenses againstMedicare, Medicaid, or the title XXservices program.The subpart also specifies conditionsunder which the Administrator willdeny Federal financial participationfor services furnished by providers orfiscal agents who fail to comply withthe disclosure requirements.§ 455.101Definitions.Agent means any person who has beendelegated the authority to obligate oract on behalf of a provider.Disclosing entity means a Medicaidprovider (other than an individualpractitioner or group of practitioners),or a fiscal agent.Other disclosing entity means anyother Medicaid disclosing entity andany entity that does not participate inMedicaid, but is required to disclosecertain ownership and control information because of participation in any ofthe programs established under title V,XVIII, or XX of the Act. This includes:(a) Any hospital, skilled nursing facility, home health agency, independent clinical laboratory, renal disease facility, rural health clinic, orhealth maintenance organization thatparticipates in Medicare (title XVIII);(b) Any Medicare intermediary orcarrier; and413VerDate Mar 15 201016:02 Nov 07, 2012Jkt 226187PO 00000Frm 00423Fmt 8010Sfmt 8010Q:\42\226187.XXXofr150PsN: PC150

§ 455.10142 CFR Ch. IV (10–1–12 Edition)(c) Any entity (other than an individual practitioner or group of practitioners) that furnishes, or arranges forthe furnishing of, health-related services for which it claims payment underany plan or program established undertitle V or title XX of the Act.Fiscal agent means a contractor thatprocesses or pays vendor claims on behalf of the Medicaid agency.Group of practitioners means two ormore health care practitioners whopractice their profession at a commonlocation (whether or not they sharecommon facilities, common supportingstaff, or common equipment).Health insuring organization (HIO) hasthe meaning specified in § 438.2.Indirect ownership interest means anownership interest in an entity thathas an ownership interest in the disclosing entity. This term includes anownership interest in any entity thathas an indirect ownership interest inthe disclosing entity.Managed care entity (MCE) meansmanaged care organizations (MCOs),PIHPs, PAHPs, PCCMs, and HIOs.Managing employee means a generalmanager, business manager, administrator, director, or other individualwho exercises operational or managerial control over, or who directly or indirectly conducts the day-to-day operation of an institution, organization,or agency.Ownership interest means the possession of equity in the capital, the stock,or the profits of the disclosing entity.Person with an ownership or control interest means a person or corporationthat—(a) Has an ownership interest totaling 5 percent or more in a disclosingentity;(b) Has an indirect ownership interest equal to 5 percent or more in a disclosing entity;(c) Has a combination of direct andindirect ownership interests equal to 5percent or more in a disclosing entity;(d) Owns an interest of 5 percent ormore in any mortgage, deed of trust,note, or other obligation secured bythe disclosing entity if that interestequals at least 5 percent of the value ofthe property or assets of the disclosingentity;(e) Is an officer or director of a disclosing entity that is organized as acorporation; or(f) Is a partner in a disclosing entitythat is organized as a partnership.Prepaidambulatoryhealthplan(PAHP) has the meaning specified in§ 438.2.Prepaid inpatient health plan (PIHP)has the meaning specified in § 438.2.Primary care case manager (PCCM) hasthe meaning specified in § 438.2.Significant business transaction meansany business transaction or series oftransactions that, during any one fiscal year, exceed the lesser of 25,000and 5 percent of a provider’s total operating expenses.Subcontractor means—(a) An individual, agency, or organization to which a disclosing entity hascontracted or delegated some of itsmanagement functions or responsibilities of providing medical care to itspatients; or(b) An individual, agency, or organization with which a fiscal agent has entered into a contract, agreement, purchase order, or lease (or leases of realproperty) to obtain space, supplies,equipment, or services provided underthe Medicaid agreeement.Supplier means an individual, agency,or organization from which a providerpurchases goods and services used incarrying out its responsibilities underMedicaid (e.g., a commercial laundry, amanufacturer of hospital beds, or apharmaceutical firm).Termination means—(1) For a—(i) Medicaid or

455.18 Provider's statements on claims forms. 455.19 Provider's statement on check. 455.20 Beneficiary verification procedure. 455.21 Cooperation with State Medicaid fraud control units. 455.23 Suspension of payments in cases of fraud. Subpart B—Disclosure of Information by Providers and Fiscal Agents 455.100 Purpose. 455.101 Definitions.