CMS Final Rule on Medicaid Program Integrity


On February 2, 2011 the Centers for Medicare and Medicaid Services (CMS) published in the Federal Register its final rule CMS 6028-FC to improve program integrity for Medicare, Medicaid and the Children’s Health Insurance Program (FR Vol. 75, No. 184, page 5861-5971).  The rule was initially proposed as CMS 6028-P on September 23, 2010 and public comments were submitted to CMS by November 16th.  Based on its review of the comments, CMS has published the final rule with amendments and an additional period for submission of public comments on the rule’s fingerprinting requirements.  The final rule is effective on March 25, 2011 and comments on the fingerprinting provisions are due on April 4, 2011.

Discussed below are several provisions of the proposed rule that were of concern to many school districts, as expressed in the public comments on the rule, and how CMS addressed those concerns in the final rule.

Suspension of Medicaid Payment:  The proposed rule required state Medicaid agencies to suspend payments to a provider based on a credible allegation of fraud with a broad definition of “credible.”  In the final rule, CMS tightened the definition of a credible allegation of fraud to require verification of credibility by the state based on a careful review of the facts and evidence on a case-by-case basis.  The rule provides specific administrative procedural safeguards for providers. (Please see 42 CFR §§ 455.2, 455.23 and FR Preamble discussion beginning on page 5935.)

Medicaid Enrollment and NPI:  The proposed rule required physicians and other professionals that prescribe or refer patients for Medicaid services to enroll in Medicaid and obtain a national provider identifier (NPI).  Many school-based clinicians refer or prescribe health services for students with disabilities and such providers are not usually enrolled in Medicaid and are not required to maintain an NPI.  The requirements for enrollment and NPIs posed potentially significant administrative hurdles and burdens for school districts and staff.  In the final rule, CMS stated in the Preamble that school-based clinicians are subject to the enrollment and NPI requirements; however, to minimize the administrative burden, CMS provided that State Medicaid agencies may (1) implement a streamlined Medicaid enrollment process and (2) delegate screening responsibilities to school districts including assigning clinicians with unique provider identification numbers for claims identification. (Please see FR Preamble page 5905.)  School districts must consult with their respective state Medicaid agencies for clarification regarding the state’s elected approach to screening school-based clinicians.

Disclosure:  The final rule clarifies that the requirement for the disclosure of individual identification information regarding a provider’s owners and managers does not apply to a school district unless the school district is organized as a corporation. (Please see FR Preamble page 5897.)

Criminal Background Checks and Fingerprinting:  As in the proposed rule, the final rule requires criminal background checks and fingerprinting of school board members and school-based staff only if required by state law or if the state has categorized school districts within the state as providers with a high risk of Medicaid fraud, waste and abuse (42 CFR § 455.434).  The individual states are required to identify the risk category for all provider types.

Medicaid Application Fee:  The proposed rule required institutional providers to pay the state Medicaid agency a $500.00 Medicaid provider application fee.  In the FR Preamble to the final rule (page 5915) CMS stated that school districts are subject to the fee to the extent required by the state Medicaid agency and the state plan for Medicaid.

CMS Rule 6028-FC can be accessed at


About Patsy Crawford

Patsy Crawford, Director of Legal Services, PCG Education, has over 30 years of legal experience and is responsible for providing legal and regulatory compliance support to the PCG Education management team. Since joining the firm in 1997, Patsy has worked closely with school district administrators and PCG Education managers and consultants to coordinate with state and federal Medicaid agencies to protect and improve billing programs for school districts. She has provided direct legal support to PCG Education projects in multiple states across the country.

Read More


Tags: , , ,



blog comments powered by Disqus