42 C.F.R. Subpart I—Program Integrity
Title 42 - Public Health
Source: 66 FR 2685, Jan. 11, 2001, unless otherwise noted.
(a) Statutory basis. This subpart implements— (1) Section 2101(a) of the Act, which provides that the purpose of title XXI is to provide funds to States to enable them to initiate and expand the provision of child health assistance to uninsured, low-income children in an effective and efficient manner; and (2) Section 2107(e) of the Act, which provides that certain title XIX and title XI provisions, including the following, apply to States under title XXI in the same manner as they apply to a State under title XIX: (i) Section 1902(a)(4)(C) of the Act, relating to conflict of interest standards. (ii) Paragraphs (2), (16), and (17), of section 1903(i) of the Act, relating to limitations on payment. (iii) Section 1903(w) of the Act, relating to limitations on provider taxes and donations. (iv) Section 1124 of the Act, relating to disclosure of ownership and related information. (v) Section 1126 of the Act, relating to disclosure of information about certain convicted individuals. (vi) Section 1128 of the Act, relating to exclusions. (vii) Section 1128A of the Act, relating to civil monetary penalties. (viii) Section 1128B(d) of the Act, relating to criminal penalties for certain additional charges. (ix) Section 1132 of the Act, relating to periods within which claims must be filed. (b) Scope. This subpart sets forth requirements, options, and standards for program integrity assurances that must be included in the approved State plan. (c) Applicability. This subpart applies to separate child health programs. Medicaid expansion programs are subject to the program integrity rules and requirements specified under title XIX. As used in this subpart— Actuarially sound principles means generally accepted actuarial principles and practices that are applied to determine aggregate utilization patterns, are appropriate for the population and services to be covered, and have been certified by actuaries who meet the qualification standards established by the Actuarial Standards Board. Fee-for-service entity means any individual or entity that furnishes services under the program on a fee-for-service basis, including health insurance services. The State's child health program must include— (a) Methods of administration that the Secretary finds necessary for the proper and efficient operation of the separate child health program; and (b) Safeguards necessary to ensure that— (1) Eligibility will be determined appropriately in accordance with subpart C of this part; and (2) Services will be provided in a manner consistent with administrative simplification and with the provisions of subpart D of this part. (a) State program requirements. The State must establish procedures for ensuring program integrity and detecting fraudulent or abusive activity. These procedures must include the following: (1) Methods and criteria for identifying suspected fraud and abuse cases. (2) Methods for investigating fraud and abuse cases that— (i) Do not infringe on legal rights of persons involved; and (ii) Afford due process of law. (b) State program integrity unit. The State may establish an administrative agency responsible for monitoring and maintaining the integrity of the separate child health program. (c) Program coordination. The State must develop and implement procedures for referring suspected fraud and abuse cases to the State program integrity unit (if such a unit is established) and to appropriate law enforcement officials. Law enforcement officials include the— (1) U.S. Department of Health and Human Services Office of Inspector General (OIG); (2) U.S. Attorney's Office, Department of Justice (DOJ); (3) Federal Bureau of Investigation (FBI); and (4) State Attorney General's office. If the State agency receives a complaint of fraud or abuse from any source or identifies questionable practices, the State agency must conduct a preliminary investigation or take otherwise appropriate action within a reasonable period of time to determine whether there is sufficient basis to warrant a full investigation. The State must establish and implement effective procedures for investigating and resolving suspected and apparent instances of fraud and abuse. Once the State determines that a full investigation is warranted, the State must implement procedures including, but not limited to the following: (a) Cooperate with and refer potential fraud and abuse cases to the State program integrity unit, if such a unit exists. (b) Conduct a full investigation. (c) Refer the fraud and abuse case to appropriate law enforcement officials. (a) A State may not make payments for any item or service furnished, ordered, or prescribed under a separate child health program to any provider who has been excluded from participating in the Medicare and Medicaid programs. (b) The following provisions and their corresponding regulations apply to a State under title XXI, in the same manner as these provisions and regulations apply to a State under title XIX: (1) Part 455, subpart B of this chapter. (2) Section 1124 of the Act pertaining to disclosure of ownership and related information. (3) Section 1126 of the Act pertaining to disclosure by institutions, organizations, and agencies of owners and certain other individuals who have been convicted of certain offenses. (4) Section 1128 of the Act pertaining to exclusions. (5) Section 1128A of the Act pertaining to civil monetary penalties. (6) Section 1128B of the Act pertaining to criminal penalties for acts involving Federal health care programs. (7) Section 1128E of the Act pertaining to the reporting of final adverse actions on liability findings made against health care providers, suppliers, and practitioners under the health care fraud and abuse data collection program. (a) A State must submit to CMS a written assurance that title XXI services will be provided in an effective and efficient manner. The State must submit the assurance— (1) With the initial State plan; or (2) For States with approved plans, with the first request to amend the approved plan. (b) A State must— (1) Provide for free and open competition, to the maximum extent practical, in the bidding of all procurement contracts for coverage or other services in accordance with the procurement requirements of 45 CFR 74.43 or 45 CFR 92.36, as applicable; or (2) Use payment rates based on public or private payment rates for comparable services for comparable populations, consistent with principles of actuarial soundness as defined at §457.902. (c) A State may establish higher rates than permitted under paragraph (b) of this section if such rates are necessary to ensure sufficient provider participation, provider access, or to enroll providers who demonstrate exceptional efficiency or quality in the provision of services. (d) All contracts under this part must include provisions that define a sound and complete procurement contract, as required by 45 CFR part 74 or 45 CFR part 92, as applicable. (e) The State must provide to CMS, if requested, a description of the manner in which rates were developed in accordance with the requirements of paragraphs (b) or (c) of this section. [66 FR 2685, Jan. 11, 2001, as amended at 66 FR 33824, June 25, 2001] Entities that contract with the State under a separate child health program must certify the accuracy, completeness, and truthfulness of information in contracts and proposals, including information on subcontractors, and other related documents, as specified by the State. (a) Managed care entity (MCE). A State that makes payments to an MCE under a separate child health program, based on data submitted by the MCE, must ensure that its contract requires the MCE to provide— (1) Enrollment information and other information required by the State; (2) An attestation to the accuracy, completeness, and truthfulness of claims and payment data, under penalty of perjury; (3) Access for the State, CMS, and the HHS Office of the Inspector General to enrollee health claims data and payment data, in conformance with the appropriate privacy protections in the State; and (4) A guarantee that the MCE will not avoid costs for services covered in its contract by referring enrollees to publicly supported health care resources. (b) Fee-for-service entities. A State that makes payments to fee-for-service entities under a separate child health program must— (1) Establish procedures to ensure that the entity certifies and attests that information on claim forms is truthful, accurate, and complete; (2) Ensure that fee-for-service entities understand that payment and satisfaction of the claims will be from Federal and State funds, and that any false claims may be prosecuted under applicable Federal or State laws; and (3) Require, as a condition of participation, that fee-for-service entities provide the State, CMS and/or the HHS Office of the Inspector General with access to enrollee health claims data, claims payment data and related records. (a) The State must assure that any entity seeking to contract as an MCE under a separate child health program has administrative and management arrangements or procedures designed to safeguard against fraud and abuse. (b) The State must ensure that the arrangements or procedures required in paragraph (a) of this section— (1) Enforce MCE compliance with all applicable Federal and State standards; (2) Prohibit MCEs from conducting any unsolicited personal contact with a potential enrollee by an employee or agent of a managed care entity for the purpose of influencing the individual to enroll with the entity; and (3) Include a mechanism for the MCE to report to the State, to CMS, or to the Office of Inspector General (OIG) as appropriate, information on violations of law by subcontractors or enrollees of an MCE and other individuals. (c) With respect to enrollees, the reporting requirement in paragraph (b)(3) of this section applies only to information on violations of law that pertain to enrollment in the plan, or the provision of, or payment for, health services. (d) The State may inspect, evaluate, and audit MCEs at any time, as necessary, in instances where the State determines that there is a reasonable possibility of fraudulent and abusive activity. If the State requires reporting of changes in circumstances that may affect the enrollee's eligibility for child health assistance, the State must: (a) Establish procedures to ensure that enrollees make timely and accurate reports of any such change; and (b) Promptly redetermine eligibility when the State has information about these changes. The State must include in each applicant's record facts to support the State's determination of the applicant's eligibility for SCHIP. The State must establish and maintain systems to identify, report, and verify the accuracy of claims for those enrolled children who meet requirements of section 2105(a) of the Act, where enhanced Federal medical assistance percentage computations apply. [66 FR 2685, Jan. 11, 2001, as amended at 66 FR 33824, June 25, 2001] The State must ensure through its contracts for coverage and services that its contractors comply with— (a) Section 422.206(a) of this chapter, which prohibits interference with health care professionals' advice to enrollees and requires that professionals provide information about treatment in an appropriate manner; and (b) Sections 422.208 and 422.210 of this chapter, which place limitations on physician incentive plans, and information disclosure requirements related to those physician incentive plans, respectively.
Title 42: Public Health
PART 457—ALLOTMENTS AND GRANTS TO STATES
Subpart I—Program Integrity
§ 457.900 Basis, scope and applicability.
§ 457.902 Definitions
§ 457.910 State program administration.
§ 457.915 Fraud detection and investigation.
§ 457.925 Preliminary investigation.
§ 457.930 Full investigation, resolution, and reporting requirements.
§ 457.935 Sanctions and related penalties.
§ 457.940 Procurement standards.
§ 457.945 Certification for contracts and proposals.
§ 457.950 Contract and payment requirements including certification of payment-related information.
§ 457.955 Conditions necessary to contract as a managed care entity (MCE).
§ 457.960 Reporting changes in eligibility and redetermining eligibility.
§ 457.965 Documentation.
§ 457.980 Verification of enrollment and provider services received.
§ 457.985 Integrity of professional advice to enrollees.
