Sneak Preview: CMS To Help States Implement Payment Suspensions

October 13, 2017 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following is excerpted from a recent article in the Single Audit Information Service.) To improve Medicaid program integrity, the Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) plans to provide additional technical assistance to encourage state agencies to suspend payments to providers during investigations of potential fraud, in response to recommendations in a recent HHS Office of Inspector General (OIG) audit.

The Social Security Act (Pub. L. 111-148), as amended, requires state Medicaid agencies to suspend payments to providers of health care items and services under the Medicaid program when there is a credible allegation of fraud against the provider, unless “good cause” exists not to suspend payment. OIG states that using payment suspensions, when appropriate, helps to protect Medicaid funds by immediately halting the flow of suspected improper spending of Medicaid dollars. A payment suspension can remain in place throughout a law enforcement investigation and potential prosecution of a health care fraud case.

An allegation of fraud is deemed credible when the state Medicaid agency has an “indicia of reliability and has reviewed all allegations, facts and evidence carefully, acting judiciously on a case-by-case basis.” HHS regulations offer states some flexibility in determining what constitutes a credible allegation of fraud, consistent with individual state law. When a Medicaid agency determines that a credible allegation of fraud exists, it may either impose a payment suspension or apply an exception indicating that “good cause” exists not to suspend payments.

When Medicaid agencies impose a payment suspension, they must notify providers of the payment suspension (generally within five days), explain the temporary nature of the payment suspension and provide information about the appeals process. The temporary payment suspensions will not continue after authorities determine that there is insufficient evidence of provider fraud or legal proceedings related to alleged fraud are complete. If a state’s law provides for an administrative appeals process, the provider may request, and must be granted, a review of the payment suspension consistent with the state’s appeals process.

A Medicaid agency, on a case-by-case basis, may determine that there is good cause not to suspend payments when there is a credible allegation of fraud against a provider, and instead apply a good cause exception. For example, law enforcement officials may request that the Medicaid agency not impose a payment suspension to avoid alerting the provider, which could jeopardize a law enforcement investigation.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)


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