CMS Clarifies Effective Date of Deemed Compliance Provisions: Extra Fraud, Waste, and Abuse Training NOT Required for Medicare Providers

11 May 2010 Publication
Authors: Lawrence W. Vernaglia

Legal News Alert: Health Care

CMS Clarifies Effective Date of Deemed Compliance Provisions: Extra Fraud, Waste, and Abuse Training NOT Required for Medicare Providers

CMS has finally confirmed that Medicare Advantage and Part D plans should not be requiring special fraud, waste, and abuse (FWA) training for providers and suppliers (collectively, “providers”) who enrolled in the Medicare program. Under Final Rules effective June 7, 2010, these providers are “deemed” to have complied with any FWA requirements by virtue of their Medicare participation. Providers are, of course, free to participate in any training programs sponsored or recommended by the Medicare plans, but they are not be required to make their employees to attend them, nor are the providers required to certify to their attendance.

Regulations initially published by CMS in December 2007, and “clarified” by CMS on August 21, 2009, outlined plan sponsors’ responsibilities in monitoring the FWA compliance of any entities with which they contract to provide services to beneficiaries. These rules could be read as requiring plans to impose training obligations on all of their contracting providers. Naturally, many providers do business with a number of plan sponsors, and the potential of duplicative training requirements for the — in many cases — thousands of potentially affected employees posed a significant operational and compliance burden on the provider and plan communities. Many plans designed online FWA training vehicles, slides, and materials and were seeking proof that all employees of their contracting providers had gone through the FWA training.

CMS clarified this issue in proposed regulations issued October 9, 2009, in which the agency indicated that Medicare providers are deemed to have satisfied the FWA training requirements. CMS has now confirmed that position in the final regulations issued on April 15, 2010. These rules outline a series of policy and technical changes to the Medicare Part C and D programs, including the FWA training issue.

One issue left open by the Final Rule was the effective date of the FWA deeming provisions. CMS, in the final regulations, stated that these provisions were effective June 7, 2010. However, because Part C and D programs operate on a calendar-year basis, the question arose whether the effective date of the “deeming” provisions would be delayed until January 1, 2011, the beginning of the next calendar year. In a memorandum dated April 30, 2010, CMS clarified the effective date of the regulations in three major areas for plan sponsors: Contract Qualification Applications, Quality Improvement Program Requirements, and MSA Deductibles. For providers that contract with plan sponsors in the Medicare Part C and prescription drug plans under the Part D program, CMS also addressed the effective date of the compliance-deeming provisions. CMS stated in its memorandum of April 30, 2010, that these regulatory provisions are applicable beginning June 7, 2010. Medicare providers will not have to wait until the next calendar year to demonstrate compliance under these regulations. If a provider holds a valid Medicare provider agreement or supplier approval, it will be deemed to be in compliance with the FWA training and education requirements of the Part C and D programs. These provisions, found at 42 C.F.R. § 422.503(b)(4)(vi)(C)(2) and § 423.504(b)(4)(vi)(C)(3), will significantly reduce the burden on providers who have struggled to demonstrate compliance with these requirements to the plan sponsors.

Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our health care clients and colleagues. If you have any questions about this alert or would like to discuss this topic further, please contact your Foley attorney or any of the following individuals:

Robert E. Slavkin
Orlando, Florida

Lawrence W. Vernaglia
Boston, Massachusetts

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