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04/04/2011

Effective Date of Certified Provider or Supplier Agreement or Approval

MLN Matters® Number: MM7232
Related Change Request (CR) #: 7232
Related CR Release Date: March 25, 2011
Effective Date: October 1, 2010
Related CR Transmittal #: R372PI
Implementation Date: April 25, 2011

Provider Types Affected

This article is for providers and suppliers subject to survey and certification requirements.

Provider Action Needed: Impact to You

This article is based on Change Request (CR) 7232 which clarifies instructions regarding the determination of the effective date of certified provider agreement or supplier approval.

What You Need to Know

The Code of Federal Regulations (42 CFR 489.13) has been revised to make it clearer that the date of a Medicare provider agreement or supplier approval may not be earlier than the latest date on which all applicable federal requirements have been met, and that such requirements include review and verification of an application to enroll in the Medicare program by the Centers for Medicare & Medicaid Services (CMS) legacy fiscal intermediary (FI), legacy carrier, or Medicare Administrative Contractor (MAC).

What You Need to Do

See the Background and Additional Information Sections of this article for further details regarding these changes.

Background

The Fiscal Year (FY) 2011 Inpatient Prospective Payment System (IPPS) final rule was published on August 16, 2010 (75 FR50042) and was effective October 1, 2010 (see the FY 2011 IPPS final rule at http://edocket.access.gpo.gov/2010/2010-19092.htm External Website on the Internet). Several provisions in the FY 2011 IPPS final rule amend Section 489.13 of the Code of Federal Regulations (42 CFR 489.13) which governs the determination of the effective date of a Medicare provider agreement or supplier approval for health care facilities that are subject to survey and certification. The revised Section 489.13 makes it clearer that:

  • The date of a Medicare provider agreement or supplier approval may not be earlier than the latest date on which all applicable federal requirements have been met; and
  • Such requirements include review and verification of an application to enroll in the Medicare program by the CMS legacy fiscal intermediary (FI), legacy carrier, Regional Home Health Intermediary (RHHI), or Medicare Administrative Contractor (MAC).

You can review revised 489.13 of the CFR at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr;sid=cbe4615ac0d1730fe7871c78553897f9;rgn=div2;view=text;node=20100816%3A1.77;idno=42;cc=ecfr;start=1;size=25 External Website on the Internet.

These clarifications were necessary because a September 28, 2009, decision of the Appellate Division of the Departmental Appeals Board (DAB) interpreted Section 489.13 as not including enrollment application processing among Federal requirements that must be met. You can review the DAB Decision No. 2271 at http://www.hhs.gov/dab/decisions/dabdecisions/dab2271.pdfExternal PDF on the Internet.

In that case a State Agency had:

  • Conducted a survey of an applicant on July 6, 2007; and
  • Received the FI's notice on November 21, 2007, recommending the applicant's enrollment approval.

The CMS Regional Office (RO) issued a provider approval effective November 21, 2007 (the date the FI recommended the applicant's enrollment approval), consistent with our traditional interpretation of Section 489.13. However, the DAB ruled that the effective date must be July 6, 2007 (the date the survey was conducted).

The DAB agreed with the applicant in this case that the requirement for the Medicare contractor to verify and determine whether an application should be approved is

  • Not a requirement for the provider to meet (under Section 489.13), but rather
  • A requirement for Medicare contractor action (DAB Decision No. 2271, page 5).

In accordance with Section 2003B of the State Operations Manual (SOM), State Agencies and accreditation organizations are aware that they should perform a survey of a new facility after the MAC/legacy FI/legacy carrier has provided notice that:

  • The information on the enrollment application has been verified, and
  • Enrollment is being recommended.

However, circumstances do occur when the sequence is reversed, i.e., the survey occurs prior to enrollment verification activities. Accreditation organizations, in particular, often find it challenging to confirm whether the MAC, FI, RHHI, or carrier has completed its review and made a recommendation, since they are dependent upon the applicant providing copies of the pertinent notices.

When the survey occurs prior to the enrollment verification activities, CMS believes it is essential that the provider agreement or supplier approval date be based on the later date, i.e., the date the contractor determined that the enrollment application was verified and recommends approval.

There are other Federal requirements not related to a facility's survey, such as the provision of required Office for Civil Rights documentation. Accordingly, the revised rule explicitly states in Section 489.13(b) that:

"Federal requirements include, but are not limited to –

  1. Enrollment requirements established in part 424, Subpart P, of this chapter. CMS determines, based upon its review and verification of the prospective provider's or supplier's enrollment application, the date on which enrollment requirements have been met;
  2. The requirements identified in (Sections) 489.10 and 489.12; and
  3. The applicable Medicare health and safety standards, such as the applicable conditions of participation, the requirements for participation, the conditions for coverage, or the conditions for certification."

Additional Information

The official instruction, CR 7232, issued to your carriers, FIs, MACs, and RHHIs regarding this change may be viewed at http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R372PI.pdfExternal PDF on the CMS website.

If you have any questions, please contact the Provider Contact Center at their toll-free number, (866) 590-6703.

Disclaimer

This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.


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