As discussed in Parts I and II of this three-part series, CMS recently implemented a number of number of program integrity provisions in a February 2, 2011, final rule aimed at reducing fraud, waste and abuse federal health care programs. To conclude this series, we address broader CMS authority to impose payment suspensions and the impending compliance plan requirement.

In the Final Rule, CMS amended the regulations governing the suspension of Medicare payments to providers. The current regulations allow CMS to suspend payments to a provider if CMS has “reliable information” that an overpayment exists. Under the Final Rule, in cases of suspected fraud, CMS may also suspend payments upon a determination by CMS and the OIG (and DOJ, as appropriate) that a “credible allegation of fraud” exists. If so, CMS may suspend payments pending an investigation of the allegations, unless CMS determines that there is “good cause” not to suspend the payments. A “credible allegation of fraud” is an allegation from any source, including fraud hotline complaints, claims data mining, provider audits, and civil false claims cases. CMS considers an allegation “credible” if it has “indicia of reliability,” a term that is not further explained in the Final Rule or the preamble. Instead, CMS stated that it will consider each allegation on a case-by-case basis without a precise evidentiary standard.

Finally, as expected, CMS has deferred final rulemaking on the issue of mandatory compliance plans for providers and suppliers. As required by Section 6401(a) of PPACA, CMS is in the process of developing a new Notice of Proposed Rule Making that will outline the required compliance plan provisions. CMS will accept further public comments at that time.