42 C.F.R. Subpart A—Medicaid Agency Fraud Detection and Investigation Program
Title 42 - Public Health
A State plan must meet the requirements of §§455.13 through 455.23. [52 FR 48817, Dec. 28, 1987] The Medicaid agency must have— (a) Methods and criteria for identifying suspected fraud cases; (b) Methods for investigating these cases that— (1) Do not infringe on the legal rights of persons involved; and (2) Afford due process of law; and (c) Procedures, developed in cooperation with State legal authorities, for referring suspected fraud cases to law enforcement officials. [43 FR 45262, Sept. 29, 1978, as amended at 48 FR 3755, Jan. 27, 1983] If the agency receives a complaint of Medicaid fraud or abuse from any source or identifies any questionable practices, it must conduct a preliminary investigation to determine whether there is sufficient basis to warrant a full investigation. [48 FR 3756, Jan. 27, 1983] If the findings of a preliminary investigation give the agency reason to believe that an incident of fraud or abuse has occurred in the Medicaid program, the agency must take the following action, as appropriate: (a) If a provider is suspected of fraud or abuse, the agency must— (1) In States with a State Medicaid fraud control unit certified under subpart C of part 1002 of this title, refer the case to the unit under the terms of its agreement with the unit entered into under §1002.309 of this title; or (2) In States with no certified Medicaid fraud control unit, or in cases where no referral to the State Medicaid fraud control unit is required under paragraph (a)(1) of this section, conduct a full investigation or refer the case to the appropriate law enforcement agency. (b) If there is reason to believe that a recipient has defrauded the Medicaid program, the agency must refer the case to an appropriate law enforcement agency. (c) If there is reason to believe that a recipient has abused the Medicaid program, the agency must conduct a full investigation of the abuse. [48 FR 3756, Jan. 27, 1983, as amended at 51 FR 34788, Sept. 30, 1986] A full investigation must continue until— (a) Appropriate legal action is initiated; (b) The case is closed or dropped because of insufficient evidence to support the allegations of fraud or abuse; or (c) The matter is resolved between the agency and the provider or recipient. This resolution may include but is not limited to— (1) Sending a warning letter to the provider or recipient, giving notice that continuation of the activity in question will result in further action; (2) Suspending or terminating the provider from participation in the Medicaid program; (3) Seeking recovery of payments made to the provider; or (4) Imposing other sanctions provided under the State plan. [43 FR 45262, Sept. 29, 1978, as amended at 48 FR 3756, Jan. 27, 1983] The agency must report the following fraud or abuse information to the appropriate Department officials at intervals prescribed in instructions. (a) The number of complaints of fraud and abuse made to the agency that warrant preliminary investigation. (b) For each case of suspected provider fraud and abuse that warrants a full investigation— (1) The provider's name and number; (2) The source of the complaint; (3) The type of provider; (4) The nature of the complaint; (5) The approximate range of dollars involved; and (6) The legal and administrative disposition of the case, including actions taken by law enforcement officials to whom the case has been referred. [43 FR 45262, Sept. 29, 1978, as amended at 48 FR 3756, Jan. 27, 1983] (a) Except as provided in §455.19, the agency must provide that all provider claims forms be imprinted in boldface type with the following statements, or with alternate wording that is approved by the Regional CMS Administrator: (1) “This is to certify that the foregoing information is true, accurate, and complete.” (2) “I understand that payment of this claim will be from Federal and State funds, and that any falsification, or concealment of a material fact, may be prosecuted under Federal and State laws.” (b) The statements may be printed above the claimant's signature or, if they are printed on the reverse of the form, a reference to the statements must appear immediately preceding the claimant's signature. As an alternative to the statements required in §455.18, the agency may print the following wording above the claimant's endorsement on the reverse of checks or warrants payable to each provider: “I understand in endorsing or depositing this check that payment will be from Federal and State funds and that any falsification, or concealment of a material fact, may be prosecuted under Federal and State laws.” (a) The agency must have a method for verifying with recipients whether services billed by providers were received. (b) In States receiving Federal matching funds for a mechanized claims processing and information retrieval system under part 433, subpart C, of this subchapter, the agency must provide prompt written notice as required by §433.116 (e) and (f). [48 FR 3756, Jan. 27, 1983, as amended at 56 FR 8854, Mar. 1, 1991] In a State with a Medicaid fraud control unit established and certified under subpart C of this part, (a) The agency must— (1) Refer all cases of suspected provider fraud to the unit; (2) If the unit determines that it may be useful in carrying out the unit's responsibilities, promptly comply with a request from the unit for— (i) Access to, and free copies of, any records or information kept by the agency or its contractors; (ii) Computerized data stored by the agency or its contractors. These data must be supplied without charge and in the form requested by the unit; and (iii) Access to any information kept by providers to which the agency is authorized access by section 1902(a)(27) of the Act and §431.107 of this subchapter. In using this information, the unit must protect the privacy rights of recipients; and (3) On referral from the unit, initiate any available administrative or judicial action to recover improper payments to a provider. (b) The agency need not comply with specific requirements under this subpart that are the same as the responsibilities placed on the unit under subpart D of this part. (a) Basis for withholding. The State Medicaid agency may withhold Medicaid payments, in whole or in part, to a provider 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. The State Medicaid agency may withhold payments without first notifying the provider of its intention to withhold such payments. A provider may request, and must be granted, administrative review where State law so requires. (b) Notice of withholding. The State agency must send notice of its withholding of program payments within 5 days of taking such action. The notice must set forth the general allegations as to the nature of the withholding action, but need not disclose any specific information concerning its ongoing investigation. The notice must: (1) State that payments are being withheld in accordance with this provision; (2) State that the withholding is for a temporary period, as stated in paragraph (c) of this section, and cite the circumstances under which withholding will be terminated; (3) Specify, when appropriate, to which type or types of Medicaid claims withholding is effective; and (4) Inform the provider of the right to submit written evidence for consideration by the agency. (c) Duration of withholding. All withholding of payment actions under this section will be temporary and will not continue after: (1) The agency or the prosecuting authorities determine that there is insufficient evidence of fraud or willful misrepresentation by the provider; or (2) Legal proceedings related to the provider's alleged fraud or willful misrepresentation are completed. [52 FR 48817, Dec. 28, 1987]
Title 42: Public Health
PART 455—PROGRAM INTEGRITY: MEDICAID
Subpart A—Medicaid Agency Fraud Detection and Investigation Program
§ 455.12 State plan requirement.
§ 455.13 Methods for identification, investigation, and referral.
§ 455.14 Preliminary investigation.
§ 455.15 Full investigation.
§ 455.16 Resolution of full investigation.
§ 455.17 Reporting requirements.
§ 455.18 Provider's statements on claims forms.
§ 455.19 Provider's statement on check.
§ 455.20 Recipient verification procedure.
§ 455.21 Cooperation with State Medicaid fraud control units.
§ 455.23 Withholding of payments in cases of fraud or willful misrepresentation.
