907 KAR 1:671.
Conditions of Medicaid provider participation; withholding overpayments,
administrative appeal process, and sanctions.
RELATES TO: KRS
Chapter 13B, 194.515, 205.510-205.990, 312.015, Chapter 360, 42 C.F.R. 431.107,
431.151-431.154, 447.10, 455, 1002, 1003, 42 U.S.C. 1128a-b(13), 1320a-3, a-3a,
a-5, a-7, 1395cc, vv, 1396b, d, m, n, 2000d
STATUTORY AUTHORITY:
KRS 194A.030(2), 194A.050(1), 205.520(3), 205.560, 205.6318, 205.8467, 42
C.F.R. 1002.1-.230, 1003.105, 42 U.S.C. 1320a-7, 1396a, b(q), d(d), m, r(a), EO
2004-726
NECESSITY, FUNCTION,
AND CONFORMITY: EO 2004-726, effective July 9, 2004, reorganized the Cabinet
for Health Services and placed the Department for Medicaid Services and the
Medicaid Program under the Cabinet for Health and Family Services. The Cabinet
for Health and Family Services, Department for Medicaid Services, has
responsibility to administer the Medicaid Program. KRS 205.8451 through
205.990, 205.624 and 194A.515 provide that the Cabinet for Health Services and
the Department for Medicaid Services shall be responsible for the control of
Medicaid provider fraud and abuse. KRS 205.520(3) authorizes the cabinet, by
administrative regulation, to comply with a requirement that may be imposed or
opportunity presented by federal law for the provision of medical assistance to
Kentucky's indigent citizenry. This administrative regulation establishes the
provisions relating to Medicaid provider participation, withholding
overpayments, appeal process and sanctions.
Section 1. Definitions.
(1) "Abuse" means provider abuse or recipient abuse as defined by KRS
205.8451(8) and (10).
(2) "Active provider
number" means the provider billing number issued by the department, or its
fiscal agent, to a provider that has presented to the department, or its fiscal
agent, a Medicaid claim for a supply or
covered service for payment under that number during the period of the
previous twelve (12) consecutive months.
(3) "Adequate access"
means pursuant to 42 CFR 1396a(8) all individuals wishing to make application
for medical assistance under the
Medicaid Program shall have an opportunity to do so, and that assistance shall
be furnished with reasonable promptness to all eligible individuals.
(4)
"Administrative appeal process" means an initial written request for
redress setting forth the issues in dispute, dispute resolution meeting, review
of documentation, prehearing, administrative hearing, recommended order, final
order and all deliberations or exchange of documents or information between a provider
and the department in accordance with KRS Chapter 13B.
(5)
"Affiliate" means an individual agency or organization controlled by
a provider or associated with a provider under common ownership or control.
(6)
"Applicant" means an individual, agency, entity, or organization that
submits an application to become a Medicaid provider.
(7)
"Application" means the completion and submission of a Medicaid
provider agreement and all required addendum and documentation specific to a
provider type, which is the contract between the provider and the department
for the provision of Medicaid services.
(8) "Billing
agent" means an individual, agency, entity or organization that is
authorized by a provider to prepare and submit claims on behalf of a provider
to the department, or its fiscal agent.
(9) "Bribes and
kickbacks" means soliciting or receiving payment, or offering or making
payment whether in cash or goods or services, in return for:
(a) Referring a
recipient to a provider for medical care, services or supplies; or
(b) Purchasing,
leasing, ordering or recommending medical care, services or supplies, for which
payment is claimed under the Medicaid Program.
(10)
"Cabinet" means the Cabinet for Health and Family Services.
(11)
"Claim" means a manually-created paper, or a computer-based
electronically-created and transmitted request for payment under the Medicaid
Program that relates to each individual billing submitted by a provider, or
their billing agent, to the department which details services rendered to a
recipient on a specific date. A claim may be either a line item of service or
multiple services for one (1) recipient on a bill.
(12)
"Conversion" means converting a Medicaid payment, or a part of a
payment, to a use or benefit other than for the use and benefit intended by the
Medicaid Program.
(13)
"Convicted" means as defined in KRS 205.8475.
(14) "Demand
letter" means correspondence to an active or inactive provider stating a
dollar amount is owed the program and shall be paid by a given date.
(15)
"Department" means the Department for Medicaid Services and its
designated agents.
(16)
"Disclosing entity" means a Medicaid provider or the fiscal agent for
the department.
(17)
"Disclosure" means the provision of information in accordance with
the requirements established in 42 CFR 455, Subpart B.
(18)
"Exclusion" means the termination of the participation of a provider
or the denial of the enrollment of a provider.
(19)
"Factor" means as defined in 42 CFR 447.10.
(20) "False
claim" means a claim for:
(a) Unfurnished
medical care, services, or supplies; or
(b) Medical care,
services, or supplies provided:
1. In excess of
accepted standards of practice for the medical care or other type of service;
2. In excess of
established limits which were communicated, in writing, to providers by the
department; or
3. If there is
documentation that the provider has knowledge of third-party coverage of the
recipient, but the provider knowingly chooses not to bill the third-party
payer.
(21) "Fiscal agent"
means a contractor that processes or pays provider claims on behalf of the
department.
(22) "Full
investigation" means the activities of Kentucky's Medicaid Fraud and Abuse
Control Unit of the Office of the Attorney General (MFACU) or other law enforcement
or investigative agency having authority to resolve a complaint of Medicaid
fraud or abuse.
(23)
"Furnish" means to provide medical care, services, or supplies that
are:
(a) Provided
directly by a provider;
(b) Provided under
the supervision of a provider; or
(c) Prescribed by a
provider.
(24) "Inactive provider
number" means the provider billing number issued by the department, or its
fiscal agent, to a provider that failed to present a Medicaid claim for medical
care, services, or supplies for payment under that number to the department, or
its fiscal agent, during the period of the previous twelve (12) consecutive
months;
(25) "Interest" means the prime
interest rate that is:
(a) Charged as a simple interest by banks
rounded to the nearest full percent, as quoted by commercial banks to large
business, as determined by the board of governors of the Federal Reserve
System; and
(b) In effect on the close of business,
July 1, which is the first day of the state fiscal year.
(26) "Knowingly"
means as defined in KRS 205.8451(5).
(27) "Managing
employee" means a general manager, business manager, administrator,
director, or other individual who exercises operational or managerial control
over, or who conducts the day-to-day operation of, an institution, entity,
organization, or agency.
(28) "Material
omission" means a failure by a provider to report or advise the department
of any fact, that if known to the department, would have caused the department
to deny, reduce, or otherwise withhold any portion of reimbursement for a
billed covered service.
(29) "Medicaid
Fraud and Abuse Control Unit" or "MFACU" means a unit in the
Office of the Attorney General of Kentucky, certified under the provisions of
42 U.S.C. 1396b(q), that conducts a statewide program for the investigation and
prosecution of violations of state laws regarding fraud and abuse in connection
with the Medicaid Program.
(30)
"Preliminary investigation" means the activities of the Office of
Inspector General (OIG), MFACU, or the department to determine whether a
complaint of Medicaid fraud or abuse has sufficient basis to warrant a full
investigation.
(31)
"Program" means the state Medicaid Program as defined by 42 U.S.C.
1396a.
(32)
"Provider" means as defined by KRS 205.8451(7).
(33)
"Recipient" means as defined by KRS 205.8451(9).
(34) "Reliable
evidence" means:
(a) A preliminary
determination based upon a preponderance of evidence as verified by the
department by audit, of unacceptable practices or significant overpayments;
(b) Information of
an ongoing investigation of a provider based on a preponderance of evidence, as
verified by the department, involving fraud or criminal conduct pertaining to
the Medicaid Program;
(c) Information
based on a preponderance of evidence, as verified by the department, from a
state professional medical licensing or certifying agency of an ongoing
investigation of a Medicaid provider involving fraud, abuse, professional
misconduct, unprofessional conduct, or utilization; or
(d) Information from
the department or other sources based on a preponderance of evidence regarding
unacceptable practices, relevant past criminal activities or program abuse.
(35)
"Sanction" means an administrative action taken by the department
which limits or bars an individual's, agency's, entity's, or organization's
participation in the Medicaid Program or imposes a fiscal penalty against the
provider, including the imposition of civil penalties, or interest imposed at
the department's discretion, or the withholding of future payments.
(36)
"Service" or "services" means a supply, covered care or
covered service under the Medicaid Program.
(37)
"Subcontractor" means an individual, agency, entity, or organization
to which a disclosing entity has:
(a) Contracted or
delegated some of its management functions or responsibilities of providing
medical care or services to its patients; or
(b) Entered into a
contract, agreement, purchase order or lease including real property, to obtain
space, supplies, equipment or nonmedical services associated with providing
services and supplies that are covered under the Medicaid Program.
(38)
"Supplier" means an individual, agency, entity, or organization from
which a provider purchases goods or services used in carrying out its
responsibilities under the Medicaid Program.
(39)
"Terminated" means a provider's participation in the Medicaid Program
has been ended, and that a contractual relationship no longer exists between a
provider and the department for the provision of Medicaid covered services to
Medicaid eligible recipients by that individual, agency, entity, organization,
fiscal agents or subcontractors of the provider.
(40)
"Unacceptable practice" means conduct by a provider which constitutes
"fraud" or "provider abuse", as defined in KRS 205.8451(2)
or (8), or willful misrepresentation, and includes the following practices:
(a) Knowingly
submitting, or causing the submission of false claims, or inducing, or seeking
to induce, a person to submit false claims;
(b) Knowingly
making, or causing to be made, or inducing, or seeking to induce, a false,
fictitious or fraudulent statement or misrepresentation of material fact in
claiming a Medicaid payment, or for use in determining the right to payment;
(c) Having knowledge
of an event that affects the right of a provider to receive payment and
concealing or failing to disclose the event or other material omission with the
intention that a payment be made or the payment is made in a greater amount
than otherwise owed;
(d) Conversion;
(e) Soliciting or
accepting bribes or kickbacks;
(f) Failing to
maintain or to make available, for purposes of audit or investigation,
administrative and medical records necessary to fully disclose the medical
necessity for the nature and extent of the medical care, services and supplies
furnished, or to comply with other requirements established in 907 KAR 1:673,
Section 2;
(g) Knowingly
submitting a claim or accepting payment for medical care, services, or supplies
furnished by a provider who has been terminated or excluded from the program;
(h) Seeking or
accepting additional payments, for example, gifts, money, donations, or other
consideration, in addition to the amount paid or payable under the Medicaid
Program for covered medical care, services, or supplies for which a claim is
made;
(i) Charging or
agreeing to charge or collect a fee from a recipient for covered services which
is in addition to amounts paid by the Medicaid Program, except for required
copayments or recipient liability, if any, required by the Medicaid Program;
(j) Engaging in
conspiracy, complicity, or criminal syndication;
(k) Furnishing
medical care, services, or supplies that fail to meet professionally recognized
standards, or which are found to be noncompliant with licensure standards
promulgated under KRS Chapter 216B and failing to correct the deficiencies or
violation as reported to the department by the Office of Inspector General, for
health care or which are beyond the scope of the provider's professional
qualifications or licensure;
(l) Discriminating
in the furnishing of medical care, services, or supplies as prohibited by 42
U.S.C. 2000d;
(m) Having payments
made to or through a factor, either directly or by power of attorney, as
prohibited by 42 CFR 447.10;
(n) Offering or
providing a premium or inducement to a recipient in return for the recipient's
patronage of the provider or other provider to receive medical care, services
or supplies under the Medicaid Program;
(o) Knowingly
failing to meet disclosure requirements;
(p) Unbundling as
defined under subsection (40) of this section; or
(q) An act committed
by a nonprovider on behalf of a provider which, if committed by a provider,
would result in the termination of the provider's enrollment in the program.
(41) "Unbundling"
means submitting fragmented
or multiple bills that results in a higher total reimbursement for tests and
services that were performed within a specified time period that are required
to be billed under a single bill code pursuant to 42 U.S.C. 1396b, that mandates
a provider utilize the uniform identification coding system Current Procedural
Terminology ("CPT") that establishes the specific range of services
that are to be billed as one (1) CPT code.
(42)
"Withholding" means not paying a provider for claims which have been
processed, pending the results of an investigation of a report of fraud or
willful misrepresentation based upon receipt of reliable evidence or as a
result of provider bankruptcy, failure to submit timely cost reports, or
closure or termination of a business.
Section 2. Methods
for Recoupment of Overpayments. (1) If a determination is made by the
department that a provider was overpaid, a demand letter shall be sent to the
provider,
at his last known mailing address. If a provider billed through an agent or
entity, a copy of a demand letter may be mailed to a provider’s designated
payment last known mailing address. The demand letter shall contain:
(a)
The amount of the overpayment;
(b) The period of
time involved;
(c) The basis for
determining the overpayment exists;
(d) Language granting a provider sixty
(60) days advance notice that the repayment is due in full; and
(e) Appeal rights, if any.
(2) Departmental adjustments of the
reimbursements rates, and differences between estimated and actual costs a
provider incurred in determining reimbursements, may create situations where a
provider was overpaid. The letter of notification of adjustments and the monies
due under this subsection shall include:
(a) All required elements of subsection
(1) of this section;
(b) Documentation to support the
department’s determination of adjustments; and
(c) Appeal rights, if any.
(3) The
provider shall within:
(a) Sixty (60)
calendar days from the date of the demand letter, pay the amount of overpayment
in full; or
(b) Sixty (60)
calendar days from the date of the demand letter, or during the administrative
appeal process, submit a written request for a payment plan.
(4) If the amount of
overpayment resulted from rate revisions and subsequent recalculations within
the Medicaid Management Information System, the department shall apply a rate
adjustment against the next payment cycle for the provider prior to notifying
the provider in writing of the amount of the overpayment.
(5) A payment plan
may be approved by the department, if a provider documents that payment in full
would create an undue hardship. A written declaration of undue hardship shall
include the following:
(a) Copies of
financial statements which indicate payment in full within sixty (60) calendar
days would create an undue hardship; and
(b) Copies of
notarized letters from at least two (2) financial institutions indicating the
provider's loan request was denied for the overpayment amount.
(6) Except as
provided for in subsection (7) of this section, payment plans shall not extend
beyond a six (6) month period.
(7) A payment plan
approved, in writing, by the Commissioner of the Department for Medicaid
Services, in accordance with subsection (5) of this section, may be approved in
excess of six (6) months, if the monthly repayment exceeds twenty-five (25)
percent of the provider's average monthly Medicaid payment based upon the
payments made the previous twelve (12) months.
(8) A payment plan
approved in excess of six (6) months shall include provisions for payments of
both principal and interest as provided in KRS Chapter 360.
(9) If a provider
fails to make a payment as specified in the payment plan or takes no action
toward repayment, the department shall recoup the amount due from future
payments. If a provider has insufficient funds available for recoupment through
the payment system in the first payment cycle following the due date, or no
longer participates in the Medicaid Program, payments shall continue to be recouped
and the department may take all lawful actions to collect the debt.
(10) Disputes.
(a) If a provider
disputes the amount of overpayment, a provider may initiate the administrative
appeals process in accordance with Section 8 or 9 of this administrative
regulation.
(b) A timely-filed
request of administrative appeal process shall stay the recoupment activities
by the department pertaining to the issues on appeal until the administrative
appeal process is final.
(c) If
the department, after reviewing all documentation submitted during the
administrative appeal process, determines that no adjustments are required, the
initial determination shall stand.
(d) If the
department determines that the amount of overpayment demand should be reduced,
a refund due to the provider shall be refunded to him within thirty (30)
calendar days from the date of the determination.
(e) If it is
determined that the amount requested should be increased, a provider shall be
notified by a new demand letter pursuant to subsection (1) of this section.
(11) Withholding
Medicare payments to recover Medicaid overpayments.
(a) The department
may request that the Centers for Medicare and Medicaid Services (CMS) withhold
future Medicare payments to a provider in order to recover Medicaid
overpayments to that provider, pursuant to 42 U.S.C. 1395vv.
(b) Amounts withheld
and forwarded to the department by CMS which are ultimately determined by the
department to be in excess of overpayments due to the Medicaid Program shall be
returned to the provider.
(12) Statutory
recovery. The department shall not issue payments otherwise due to a provider,
if the department has been notified by a state or federal government agency or
by a court that a court order exists requiring the department to withhold
payments. The payments shall be withheld in accordance with the provisions of
the order.
(13) Medicare
overpayments. If ordered to recoup payment by CMS, the department shall recoup
the federal share of Medicaid payments, which is the portion of the payment
funded with federal funds, as a means to recover Medicare overpayments pursuant
to 42 U.S.C. 1396m.
(14) A contract for
the sale or change of ownership of a provider participating in the Medicaid
Program shall specify whether the buyer or seller is responsible for amounts
owed to the department by the provider, regardless of whether the amounts have
been identified at the time of the sale. In the absence of specification in the contract
for the sale or change of ownership, the recipient of the payment, who
otherwise would be the provider of record at the time the department made the
erroneous payment, shall have the responsibility for liabilities arising from
that payment, regardless of when identified.
Section 3.
Administrative Process for Identification and Referral of Unacceptable
Practices. (1) A preliminary investigation of alleged unacceptable practice
shall be conducted by the department or its agent, if:
(a) A complaint is
received by or referred from:
1. The department;
2. The cabinet; or
3. The Office of
Attorney General; or
(b) Questionable or
unacceptable practices are identified by the department.
(2) If the findings
of a preliminary investigation indicate that an incident of fraud or abuse
involving substantial allegations or other indication of fraud may have
occurred under the Medicaid Program, a referral for a full investigation shall
be made to the MFACU or the Office of the United States Attorney, if
appropriate.
(3) In order to
facilitate a full investigation, the department shall, at the request of the
MFACU or the Office of the United States Attorney, provide access to, and free
copies of, records, data, or information kept by the department, its
contractors, or providers, if authorized, as specified in 907 KAR 1:672, Section
4.
(4) A full
investigation shall continue until:
(a) Appropriate
legal action is initiated;
(b) The
investigation is discontinued because of insufficient evidence to support the
allegation of unacceptable practice; or
(c) The case is
returned to the department for administrative action.
(5) During a
preliminary or full investigation, the department may make an administrative
determination that a provider has committed an act of unacceptable practice
based on receipt of reliable evidence. The department shall issue a written
notice of a determination of unacceptable practice to a provider upon which an
exclusion or sanction is intended to be imposed, as specified in Section 5 of
this administrative regulation. The notice shall be mailed to a provider's last
know mailing address. A copy may be mailed to the provider's designated payment
last known mailing address. The notice shall clearly state:
(a) The
determination made;
(b) The basis and
specific reasons for the determination;
(c) The effect of
the action to be taken;
(d) The amount of
overpayment or penalty, if any;
(e) The effective
date of the action; and
(f) The
administrative appeal process rights of the provider, if any, as established in
Sections 8 and 9 of this administrative regulation.
(6) During a
preliminary or full investigation, the department may refer the case to the
MFACU or the Office of the United States Attorney for appropriate action.
(7) The Medicaid
Program or its fiscal agents or contractors may, as it deems necessary and
reasonable, use random or other statistical sampling methodologies and
extrapolate the Medicaid Program's findings based on the sample.
Section 4.
Withholding of Payments During an Investigation of Fraud or Willful
Misrepresentation. (1) The department may withhold Medicaid payments pursuant
to 42 CFR 455.23 upon receipt of reliable evidence that the circumstances
giving rise to the need for a withholding of payments involve fraud or willful
misrepresentation under the Medicaid Program.
(2) The department
may withhold payments without first notifying a provider of its intention to
withhold payments.
(3) The department
shall mail written notice to a provider at the provider's last known mailing
address of its withholding of program payments within five (5) calendar days of
the date upon which withholding began. The department may mail a copy of the
written notice to an agent or entity that submitted the bills, which resulted
in the amounts to be withheld pursuant to 42 CFR 455.23.
(a) The notice shall
establish the general allegations of the nature of the withholding action,
including the types of payments and payment code sections to which fraud or
willful misrepresentation is alleged to have occurred. The notice shall not
disclose specific information concerning its ongoing investigation.
(b) The notice shall
advise a provider:
1. That payments are
being withheld in accordance with this administrative regulation;
2. The statutory and
regulatory basis for withholding and the facts upon which the action is taken;
3. The date upon
which withholding began;
4. That withholding
shall be for a temporary period;
5. The circumstances
under which withholding shall be discontinued;
6. The type of
Medicaid claim, as appropriate, to which withholding shall apply;
7. The provider's
right to submit written evidence for consideration by the department; and
8. The provider's
administrative appeal process rights, if any, in accordance with Sections 8 and
9 of this administrative regulation.
(4) A withholding of
payment action under this section shall be temporary and shall not continue
after:
(a) The
investigation has been discontinued due to insufficient evidence of fraud or
willful misrepresentation by the provider;
(b) Legal
proceedings related to the provider's alleged unacceptable practice are final
and not subject to further appeal and court-ordered, deferred prosecution, or
plea-bargained restitution has been paid; or
(c) The matter has
been resolved between the department and the provider through an administrative
determination of unacceptable practice, as specified in Section 3 of this
administrative regulation.
(5) Upon completion
of the process established in subsection (4)(a) and (b) of this section, all
moneys withheld not otherwise used to offset a valid overpayment or
court-ordered restitution, due on claims shall be promptly disbursed to a
provider.
Section 5.
Sanctions. (1) The department shall comply with the requirements of 42 CFR 1002
and 42 U.S.C. 1320a-7.
(2) The department
shall impose sanctions as provided in KRS 205.8467 and Sections 3, 4, 5, and 6
of this administrative regulation.
(3) The department
may hold, during its administrative determination of unacceptable practice, a
provider responsible and liable for the conduct and actions of its affiliates,
representatives, employees, or subcontractors. Conduct shall only be imputed to
another if:
(a) The conduct was
accomplished within the course of the duties of the provider to be sanctioned;
and
(b) The provider had
knowledge, if:
1. The provider knew
or reasonably should have known of the conduct; or
2. The conduct was
effected with the knowledge and consent of the provider.
(4) If the
department sanctions a provider, it may also sanction an affiliate of the
provider. A determination to sanction an affiliate shall be made during the
process leading to the administrative determination of unacceptable practice,
on a case-by-case basis, after full review and consideration of all relevant
facts and circumstances leading to the sanction of the provider. An affiliate
shall have the same notification, time limits to dispute, due process rights,
and burden of proof as a provider.
(5) The sanction
process may include a termination of a provider from the Medicaid Program. If a
termination is made, the termination notice shall specify the period of
exclusion. In determining the sanction, or the duration of exclusion, the
department shall consider as appropriate:
(a) The number and
nature of the unacceptable practice incidents;
(b) The nature and
extent of the adverse impact the violations had on recipients;
(c) The amount of
damages to the Medicaid Program;
(d) Past criminal records of
activities involving a child, patient or adult in matters of abuse, neglect,
sexual abuse, malpractice, or the personal involvement in fraud or another
violation of 42 U.S.C. 1128a-b13, that may have been discovered as a result of
the investigation of the unacceptable practice or other related material facts
that may impact the health, safety and well-being of Medicaid recipients; and
(e) The previous
record of violations by the provider under Medicare, Medicaid or other program
administered by the department.
(6) The sanction
process shall include liability for civil payments, restitution of overpayments
and agency costs as specified in KRS 205.8467.
(7) The department
shall use a lien, as specified in KRS 205.8471, to assure payment of
restitution and monetary penalties imposed under the administrative
determination of fraud.
(8) A provider
excluded from the Medicare Program shall be excluded from the Medicaid Program
for the same period of time.
(9) The provider
shall be notified in writing by the department of the sanctions that are
imposed pursuant to 42 CFR 1001.2002.
Section 6.
Termination of Provider Participation. (1) Terminations and hearings.
(a) Before the participation of a nursing
facility, as defined in 42 U.S.C. 1396r(a), or an intermediate care facility
for the mentally retarded, as defined in 42 U.S.C. 1396d(d), is terminated, it
shall have the right to receive an administrative hearing in accordance with Sections
8 and 9 of this administrative regulation and 42 CFR 431.151 through 431.154.
(b) Except as provided in paragraph (a)
of this subsection, provider participation shall be terminated without prior
hearing.
(2) A
provider's participation may be terminated by either the provider or the
department upon thirty (30) calendar days written notice to the other without
cause or as otherwise specified in the provider agreement.
(3) A provider's
participation may be terminated and a period of exclusion imposed, if an
administrative determination is made, as established in Section 3 of this
administrative regulation, that the provider engaged in an unacceptable
practice.
(4) Except as provided
for in 907 KAR 1:672, failure to maintain up-to-date information, or to submit
the information within thirty-five (35) calendar days of a request by the
department, shall result in termination of a provider's participation in the
Medicaid Program.
(5) A provider's
participation shall be terminated immediately, if it is determined that the
information provided at the time of application or reinstatement was incorrect,
inaccurate or incomplete and if provision of correct, accurate and complete
information would have resulted in the denial of the application based upon one
(1) or more of the factors established in 907 KAR 1:672 or this administrative
regulation.
(6) A provider's
participation may be terminated, if the provider fails or refuses to pay or
enter into an agreement to pay the amount of a penalty imposed, including
interest, in accordance with Section 5 of this administrative regulation and
KRS 205.8467 within sixty (60) calendar days from the date of the department's
notice or the date of a hearing decision, if they occur.
(7) A provider's
participation in Medicaid shall be terminated, if the provider fails to submit
a completed and signed application within thirty-five (35) calendar days from
the date of the notice to provide the application.
(8) A provider's
participation in Medicaid shall be terminated and a period of exclusion imposed
upon a Medicare or Medicaid related conviction through the judicial process
pursuant to 42 U.S.C. 1320a-7.
(9) A provider's
participation in Medicaid shall be terminated in accordance with 42 CFR
1003.105 on the date of termination or suspension from Medicare.
(10) A provider's
participation in Medicaid shall be terminated as of the date of a termination,
revocation, or suspension of a registration, certification or license to
practice a medical profession, or as required to provide medical care, services
or supplies under Medicaid.
(11) A provider's
participation in Medicaid shall be terminated and a new application required,
if the ownership or controlling interest of the provider has substantially
changed since the acceptance of the current enrollment application, which may
include one (1) or more of the following actions:
(a) A sole
proprietor transfers title and property to another party;
(b) The addition,
removal, or substitution of one (1) or more partners of a provider organized as
a partnership effects
the termination of the partnership, and creates a successor partnership or
other entity;
(c) An incorporated provider merges with
an incorporated institution which is not participating in the program and the
nonparticipating institution is the surviving corporation;
(d) Two (2) or more corporate providers
consolidate and the consolidation results in the creation of a new corporate
entity;
(e) Two (2) or more unincorporated
providers consolidate;
(f) The sale, purchase, exchange of
stock, merger or other consolidation of the
business or assets directly related to the provision of health care, if the
sale results in a change of ownership or control of a provider;
(g) If the ownership
or controlling interest of the provider has substantially changed since the
acceptance of its enrollment application regardless of reason; or
(h) A provider, or a
person, or organization having direct or indirect ownership, or control
interest in the disclosing entity as defined by 42 CFR 455.101 and 102, is
listed, or required to be listed, on the current Medicaid enrollment
application and has been convicted in a court of appropriate jurisdiction of
criminal violations involving either a Medicare- or Medicaid-related offense
and that conviction is final and not under appeal.
(12) The department may take into
consideration its requirement to provide recipients adequate access to medical
care, prior to an actual provider’s termination from the Medicaid Program.
(13) A provider shall submit a minimum of
one (1) Medicaid claim for payment for each provider number issued to that
provider within twelve (12) consecutive months to have that number remain as
"active" and in good status.
(14) Termination of inactive provider
numbers. A provider shall be determined to have abandoned his provider number
if twenty-four (24) consecutive months shall have expired without a claim being
submitted upon that provider number to the department, or its fiscal agent for
payment.
(15) The department may terminate a
provider number and the provider’s corresponding right to participate in the
program for inactivity of billing if:
(a) A provider fails to submit the first
claim upon the number initially issued to the provider within a period of
twenty (24) months from the date the number was issued by the department, or
its fiscal agent; or
(b) A provider number, that has had at
least one (1) Medicaid claim submitted to the department, or its fiscal agent
for payment, has no bill submitted for that number for twenty-four (24)
consecutive months defined as:
1. When a period of twelve (12)
consecutive months shall pass without a Medicaid claim being submitted for
payment, the number shall be inactive; and
2. When a period of an additional twelve
(12) consecutive months has passed with the number remaining inactive.
(16) A
notice advising a provider of the termination and of the requirements to make a
new application for enrollment shall be sent to the provider thirty (30)
calendar days prior to his termination from the program, unless:
(a) Twenty (20) days shall have elapsed
from the date of the notice of Medicaid exclusion pursuant to 42 CFR 1001.2002;
(b) Immediately required due to federal
exclusion pursuant to 42 U.S.C. 1320a-7;
(c) Immediately required due to
revocation or suspension of professional license or other action of:
1. A court of competent jurisdiction; or
2. The professional board governing the
profession; or
(d) Otherwise required pursuant to this
administrative regulation.
(17) Notice
of termination.
(a) A notice of
termination shall:
1. Be in writing;
2. Be mailed to a
provider's last known mailing address;
3. State the reason
for the termination;
4. State the effective
date of the termination;
5. State the date
the provider may submit an application for reenrollment, if appropriate;
6. State a
provider's hearing rights, if any, in accordance with Sections 8 and 9 of this
administrative regulation;
and
7. Contain the basis
of the exclusion, the length of the exclusion, the factors considered in
setting the length of the exclusion, and the effect of the exclusion pursuant
to 42 CFR 1001.2002, if the termination is the result of a federal or state
sanction exclusion.
(b) If notice has
been provided in accordance with Section 3 (5) of this administrative
regulation, no additional notice of termination shall be required.
(18) The department
may extend participation or waive termination for a provider of covered care,
service or supply under the Medicaid Program, if necessary to assure that
adequate access to Medicaid services will be available in the area served by
the provider pursuant to 42 CFR 1396a(8).
(19) The department
may terminate a provider immediately, if necessary to protect the health,
safety, or well-being of Medicaid recipients.
Section 7. Provider
Reinstatement or Reenrollment Following Termination. (1) A provider whose
participation has been terminated under the provisions of this administrative
regulation may request reinstatement in accordance with:
(a) The requirements
established in the department's written provider application;
(b) The enrollment
requirements pursuant to 907 KAR 1:672;
(c) Other
requirements pursuant to this administrative regulation; and
(d) A written
declaration of the provider’s request for reinstatement on the first page of
the application form.
(2) The department
may grant reinstatement from an exclusion based on a program violation, if the
provider shall have:
(a) Demonstrated to
the department that the violation which led to the sanction is corrected; or
(b) Otherwise
established to the department's satisfaction that further violations will not
be repeated.
(3) If the
department approves a request for reinstatement after imposition of a sanction
in accordance with Section 5 of this administrative regulation, the department
shall provide written notice to the provider and to all others who were
informed of the sanction, specifying the date on which program participation
may resume. Participation by a provider, reinstated under this section, is
conditional upon their compliance with their assurance of no further
violations.
(4) A provider
terminated from the Medicaid Program and excluded for a specified period of
time shall be eligible for reenrollment upon the expiration of the period of
exclusion. Providers excluded on the basis of a conviction for a Medicare- or
Medicaid-related offense shall not be eligible for reenrollment until:
(a) The conviction
shall be final and not
under appeal;
(b) The specified period of exclusion
shall have expired; and
(c) The provisions of subsections (1) and
(2) of this section have been met.
(5) A provider that has an outstanding
debt to the program shall not be reinstated or reapproved for Medicaid Program
participation.
Section 8.
Resolution of Provider Disputes Prior to Administrative Hearing. (1) If a
provider disagrees with a Medicaid determination with regard to an appealable
issue as provided for in Section 9 of this administrative regulation, the
provider may request a dispute resolution meeting. The request shall be in
writing and mailed to and received by the branch manager that initiated the
department-written determination within thirty (30) calendar days of the date
the notice was
received by the provider. The department shall not accept or honor a request
for administrative appeals process, or a part thereof, that is filed by a
provider prior to receipt of the department-written determination that creates
an administrative appeal right under this administrative regulation.
(2) A provider's
request for a resolution meeting shall clearly:
(a) Identify each
specific issue and dispute;
(b) State the basis
on which the department's decision on each issue is believed to be erroneous;
(c) Provide
documentation or a summary supporting the provider's position; and
(d) State the name,
mailing address, and telephone number of individuals who are expected to attend
the dispute resolution meeting on the provider's behalf.
(3) Either the department or
the provider may request the presence of a court reporter at the dispute
resolution meeting. A court reporter shall be secured in advance of the
meeting, and a dispute resolution meeting shall not be postponed solely due to
the failure to timely secure a court reporter.
(4) Except if the court reporter was
requested solely by the provider, the department shall bear the cost of a court
reporter. Each party shall at all times bear the costs of requested transcribed
copies.
(5) Dispute resolution meetings involving
a court reporter shall be conducted face to face, and shall not be conducted
via telephone.
(6) If an
administrative hearing is requested, the transcript shall become part of the
official record of the hearing pursuant to KRS 13B.130.
(7)
The department shall, within ten (10) calendar days of receipt of the request
for a dispute resolution meeting, send a written response to the provider
identifying the time and place in which the meeting shall be held within thirty
(30) days of receipt of the request and identifying the department's
representative who is expected to attend the meeting. The meeting shall be held
within forty (40) calendar days of receipt of the request, unless a
postponement is requested. The dispute resolution meeting may be postponed for
a maximum additional period of sixty (60) calendar days, at the request of any
party.
(8) The dispute
resolution meeting shall be conducted in an informal manner as directed by the
department's representative. The provider may present evidence or testimony to
support his case. Each party shall be given an opportunity to ask questions to
clarify the disputed issue or issues.
(9) A provider may,
within the same deadline specified in subsection (1) of this section, submit
information that the provider wishes to be considered in relation to the
department's determination without requesting a dispute resolution meeting. The
submission of additional documentation shall not extend the thirty (30) day
time period for requesting a resolution meeting.
(10) The department, after the dispute
resolution meeting, or the date the information to be considered was presented
to the department as established in subsection (9) of this section, shall
within thirty (30) calendar days:
(a) Uphold, rescind, or modify the
original decision with regard to the
disputed issue; and
(b) Provide written
notice to the provider of the department's decision and the facts upon which it
is based with reference to applicable statutes and administrative regulations.
(11) Information
submitted for the purpose of informally resolving a provider dispute shall not
be considered a request for an administrative hearing.
(12) The department may
waive the dispute resolution meeting, at its sole discretion, and issue a
decision in lieu of the meeting, with the decision subject to administrative
hearing under Section 9 of this administrative regulation.
(13) The department may postpone the
issuance of its findings of the dispute resolution meeting, or its review of
the materials submitted in lieu of a dispute resolution meeting, by mailing a
written notice to the provider stating the reason for the delay and the
anticipated date of completion of the review. A postponement shall not extend
beyond 180 days.
Section 9. Administrative
Hearing. (1) The administrative hearing shall be conducted in accordance with
KRS Chapter 13B by a hearing officer who is knowledgeable of Medicaid policy,
as established in federal and state laws.
(2) The secretary of
the cabinet,
pursuant to KRS 13B.030(1), shall delegate by administrative order conferred
powers to conduct administrative hearings under this administrative regulation.
(3) The department, in addition to
Section 8(1) of this administrative regulation, shall not accept or honor a
request for administrative appeals process, or a part thereof, by a provider
that is:
(a) Filed at the state level for a
federal-mandated exclusion subsequent to a federal notice of the exclusion
containing the federal appeal rights; or
(b) Filed at the state level for program
exclusion resulting from a criminal conviction by the court of competent
jurisdiction, upon exhaustion or failure to timely pursue the judicial appeal
process.
(4) The
administrative hearing process shall be used in the following situations:
(a) If a provider is
a nursing facility as defined in 42 U.S.C. 1396r(a), or is an intermediate care
facility for the mentally retarded as defined in 42 U.S.C. 1396d(d), and
participation is terminated regardless of reason;
(b) A provider alleges
discrimination by the department as prohibited by 42 U.S.C. 2000d;
(c) The department
imposes a sanction;
(d) The department
requires repayment of a noncourt-established overpayment or noncourt-ordered
restitution; or
(e) A provider's
payments are being withheld in accordance with Section 4 of this administrative
regulation.
(5) A written
request for an administrative hearing shall be received by the department
within thirty (30) calendar days of the date of receipt of the department's
notice of a determination or a dispute resolution decision. This request shall
be sent to the Office of the Commissioner, Department for Medicaid Services,
Cabinet for Health and Family Services, 275 East Main Street, 6th Floor,
Frankfort, Kentucky 40621-0002.
(6) The department
shall forward to the hearing officer an administrative record which shall
include the notice of action taken, the statutory or regulatory basis for the
action taken, the department's decision following the resolution process, and
all documentary evidence provided by the provider, his billing agent,
subcontractor, fiscal agent or another provider-authorized individual to the
department.
(7) The notice of
the administrative hearing shall comply with KRS 13B.050.
(a) The
administrative hearing shall be held in Frankfort, Kentucky no later than sixty
(60) calendar days from the date the request for the administrative hearing is
received by the department.
(b) The administrative hearing
date may be extended beyond the sixty (60) calendar days by:
1. A mutual agreement by the provider and
the department; or
2. A continuance granted by the hearing
officer.
(8) If a prehearing
conference is requested, it shall be held at least seven (7) calendar days in
advance of the hearing date. Conduct of the prehearing conference shall comply
with KRS 13B.070.
(9) If a
provider does not appear at the hearing on the scheduled date and the hearing
has not been previously rescheduled, the hearing officer may find a provider in
default pursuant to KRS 13B.050(3)(h). A hearing request shall be withdrawn
only under the following circumstances:
(a) The hearing
officer receives a written statement from a provider stating that the request
is withdrawn; or
(b) A provider makes
a statement on the record at the hearing that he is withdrawing his request for
the hearing.
(10) Documentary
evidence to be used at the hearing shall be made available in accordance with
KRS 13B.090.
(11) Information
relating to the selection of the provider for audit, investigation notes or other
materials which may disclose auditor investigative techniques, methodologies,
material prepared for submission to a law enforcement or prosecutorial agency,
information concerning law enforcement investigations, judicial proceedings,
confidential sources or confidential information shall not be revealed, unless
exculpatory in nature as required pursuant to KRS 13B.090(3).
(12) A hearing
officer shall preside over the hearing and shall conduct the hearing in
accordance with KRS 13B.080 and 13B.090.
(13) The issues
considered at a hearing shall be limited to:
(a) Issues directly raised in the initial
request for a dispute resolution meeting;
(b) Issues directly raised during the
disputed resolution meeting; or
(c) Materials submitted in lieu of a dispute
resolution meeting.
(14) KRS 13B.090(7) shall
govern the burdens of proof.
(a) The department shall have the initial
burden of showing the existence of the administrative regulations or statutes
upon which the determination was based.
(b) If the determination
is based upon an alleged failure of a provider to comply with applicable
generally accepted business, accounting, professional, chiropractic or medical
practices or standards of health care, the department shall establish the
existence of the practice or standard.
(c) The department
shall be responsible for notifying the hearing officer of previous relevant
violations by the provider under Medicare, Medicaid, or other program
administered by the Cabinet for Health and Family Services, or relevant prior
actions under Section 5(5) of this administrative regulation, which the
department wishes the hearing officer to consider in his deliberations.
(15) The hearing
officer shall issue a recommended order in accordance with KRS 13B.110.
(16) Except for the
requirement that the request for the administrative appeal process, or a part
thereof, be filed in a timely manner, the hearing officer may grant an
extension of time specified in this section, if determined necessary for the
efficient administration of the hearing process or to prevent an obvious
miscarriage of justice with regard to the provider. An extension of time for
completion of the recommended order shall comply with the requirements of KRS
13B.110(2) and (3).
(17) A final order shall
be entered in accordance with KRS 13B.120.
(18) The cabinet
shall maintain an official record of the hearing in compliance with KRS
13B.130.
(19) In the
correspondence transmitting the final order, clear reference shall be made to
the availability of judicial review pursuant to KRS 13B.140 and 13B.150
Section 10. Actions
Taken at the Conclusion of the Administrative Appeal Process. (1) The stay on recoupment
granted under Section 2(10)(b) of this administrative regulation shall not
extend to judicial review, unless a stay is granted pursuant to KRS 13B.140(4).
(2) If during an
administrative appeal process circumstances require a new or modified
determination letter, new appeal rights shall be provided in accordance with
this administrative regulation.
(3) Thirty (30)
calendar days after the issuance of the final order pursuant to KRS 13B.120,
the department:
(a) Shall initiate
collection activities, and take all lawful actions to collect the debt; and
(b) May enact
program terminations, sanctions pursuant to 42 U.S.C. 1320a-7, or other actions
that were held in abeyance pending the decision of the administrative appeal
process. (21 Ky.R. 2346; Am. 3043; 22 Ky.R. 73; eff. 6-21-95; 2178; eff.
7-5-96; 27 Ky.R. 137; eff. 7-17-2000; 28 Ky.R. 975; 1422; eff. 12-19-2001.)
