42 C.F.R. § 417.500 Sanctions against HMOs and CMPs.
Title 42 - Public Health
(a) Basis for imposition of sanctions. CMS may impose the intermediate sanctions specified in paragraph (d) of this section, as an alternative to termination of contract, if CMS determines that an HMO or CMP does one or more of the following: (1) Fails substantially to provide the medically necessary services required to be provided to a Medicare enrollee and the failure adversely affects (or has a substantial likelihood of adversely affecting) the enrollee. (2) Requires Medicare enrollees to pay amounts in excess of premiums permitted. (3) Acts, in violation of the provisions of subpart K of this part, to expel or to refuse to reenroll an individual. (4) Engages in any practice that could reasonably be expected to have the effect of denying or discouraging enrollment (except as permitted by subpart K of this part) by eligible individuals whose medical conditions or histories indicate a need for substantial future medical services. (5) Misrepresents or falsifies information that it furnishes under this part to CMS, an individual, or to any other entity. (6) Fails to comply with the requirements of section 1876(g)(6)(A) of the Act relating to the prompt payment of claims. (7) Fails to meet the requirement in section 1876(f)(1) of the Act that not more than 50 percent of the organization's enrollment be Medicare beneficiaries and Medicaid recipients. (8) Has a Medicare risk contract and— (i) Employs or contracts with individuals or entities excluded from participation in Medicare under section 1128 or section 1128A of the Act for the provision of health care, utilization review, medical social work, or administrative services; or (ii) Employs or contracts with any entity for the provision of those services (directly or indirectly) through an excluded individual or entity. (9) Fails to comply with the requirements of §§417.479(d) through (i) relating to physician incentive plans. (b) Notice of sanction and opportunity to respond—(1) Notice of sanction. Before imposing the intermediate sanctions specified in paragraph (d) of this section, CMS— (i) Sends a written notice to the HMO or CMP stating the nature and basis of the proposed sanction; and (ii) Sends the OIG a copy of the notice (other than a notice regarding the restriction on Medicare and Medicaid enrollees as described in paragraph (a)(7) of this section), once the sanction has been confirmed following the notice period or the reconsideration. (2) Opportunity to respond. CMS allows the HMO or CMP 15 days from receipt of the notice to provide evidence that it has not committed an act or failed to comply with a requirement described in paragraph (a) of this section, as applicable. CMS may allow a 15-day addition to the original 15 days upon receipt of a written request from the HMO or CMP. To be approved, the request must provide a credible explanation of why additional time is necessary and be received by CMS before the end of the 15-day period following the date of receipt of the sanction notice. CMS does not grant an extension if it determines that the HMO's or CMP's conduct poses a threat to an enrollee's health and safety. (c) Informal reconsideration. If, consistent with paragraph (b)(2) of this section, the HMO or CMP submits a timely response to CMS's notice of sanction, CMS conducts an informal reconsideration that: (1) Consists of a review of the evidence by a CMS official who did not participate in the initial decision to impose a sanction; and (2) Gives the HMO or CMP a concise written decision setting forth the factual and legal basis for the decision that affirms or rescinds the original determination. (d) Specific sanctions. If CMS determines that an HMO or CMP has acted or failed to act as specified in paragraph (a) of this section and affirms this determination in accordance with paragraph (c) of this section, CMS may— (1) Require the HMO or CMP to suspend acceptance of applications for enrollment made by Medicare beneficiaries during the sanction period; (2) Suspend payments to the HMO or CMP for Medicare beneficiaries enrolled during the sanction period; and (3) Require the HMO or CMP to suspend all marketing activities to Medicare enrollees. (e) Effective date and duration of sanctions—(1) Effective date. Except as provided in paragraph (e)(2) of this section, a sanction is effective 15 days after the date that the organization is notified of the decision to impose the sanction or, if the HMO or CMP timely seeks reconsideration under paragraph (c) of this section, on the date specified in the notice of CMS's reconsidered determination. (2) Exception. If CMS determines that the HMO's or CMP's conduct poses a serious threat to an enrollee's health and safety, CMS may make the sanction effective on a date before issuance of CMS's reconsidered determination. (3) Duration of sanction. The sanction remains in effect until CMS notifies the HMO or CMP that CMS is satisfied that the basis for imposing the sanction has been corrected and is not likely to recur. (f) Termination by CMS. In addition to or as an alternative to the sanctions described in paragraph (d) of this section, CMS may decline to renew a HMO's or CMP's contract in accordance with §417.492(b), or terminate the contract in accordance with §417.494(b). (g) Civil money penalties. If CMS determines that a HMO or CMP has committed an act or failed to comply with a requirement described in paragraph (a) of this section (with the exception of the requirement to limit the percentage of Medicare and Medicaid enrollees described in paragraph (a)(7) of this section), CMS notifies the OIG of that determination. CMS also conveys to the OIG information when it reverses or terminates a sanction imposed under this subpart. In accordance with the provisions of 42 CFR part 1003, the OIG may impose civil money penalties on the HMO or CMP in addition to or in place of the sanctions that CMS may impose under paragraph (d) of this section. [59 FR 36083, July 15, 1994, as amended at 60 FR 45681, Sept. 1, 1995; 61 FR 13448, Mar. 27, 1996]
Title 42: Public Health
PART 417—HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL PLANS, AND HEALTH CARE PREPAYMENT PLANS
Subpart L—Medicare Contract Requirements
§ 417.500 Sanctions against HMOs and CMPs.
