On March 25, 2011, CMS released an informational bulletin providing guidance on Section 6402(h)(2) of the Patient Protection and Affordable Care Act (PPACA). Section 6402(h)(2) of PPACA provides that States will not receive Federal financial participation (FFP) in the Medicaid program for items or services furnished by an individual or entity if the State has failed to suspend payments pending an investigation of a credible allegation of fraud, unless the State determines that “good cause” exists not to suspend payments. In addition, CMS released a set of frequently asked questions (FAQs) regarding Section 6402(h)(2) of PPACA. CMS released a final rule implementing this provision on February 2, 2011.
The informational bulletin provides guidance on what constitutes “good cause” for a State to determine not to suspend Medicaid payments or to discontinue an existing payment suspension. In addition, a State may impose a partial suspension of Medicaid payments if a good cause exception exists. According to the informational bulletin, good cause includes but is not limited to the following:
- Specific requests by law enforcement that State officials not suspend (or continue to suspend) payment.
- If a State determines that other available remedies implemented by the State could more effectively or quickly protect Medicaid funds than would implementing (or continuing) a payment suspension.
- If a provider furnishes written evidence that persuades the State that a payment suspension should be terminated or imposed only in part.
- A determination by the State agency that certain specific criteria are satisfied by which recipient access to items or services would otherwise be jeopardized.
- A State may, at its discretion, discontinue an existing suspension to the extent law enforcement declines to cooperate in certifying that a matter continues to be under investigation and therefore warrants continuing the suspension.
- A determination by the State agency that payment suspension (in whole or in part) is not in the best interests of the Medicaid program.
- The credible allegation focuses solely on a specific type of claim or arises from only a specific business unit of a provider and the State determines that a suspension in part would effectively ensure that potentially fraudulent claims were not continuing to be paid.
CMS also released a set of FAQs regarding Section 6402(h)(2) of PPACA. Noting that States may have different considerations in determining what constitutes a credible allegation of fraud, CMS believes “States should have the flexibility to determine what constitutes a ‘credible allegation of fraud’ consistent with individual State law.” In addition, CMS provides additional guidance on the potential sources of credible allegations of fraud. According to the FAQs, credible allegations can come from “any source,” including but not limited to: (1) Fraud hotline complaints; (2) Claims data mining; and (3) Patterns identified through provider audits, civil false claims cases, and law enforcement investigations. Given that referrals can come from any source, it is conceivable that that Medicaid Integrity Contractors (MICS) and/or Medicaid Recovery Audit Contractors (Medicaid RACs) could make such referrals. CMS also notes the potential for mistaken or false reports of allegations of fraud, and thus “CMS encourages States to not solely rely on a singular allegation without considering the totality of the facts and circumstances surrounding any particular allegation or set of allegations.”