Medicare program; Medicare integrity program, intermediary and carrier functions, and conflict of interest requirements--HCFA. Proposed rule

This proposed rule would implement section 1893 of the Social Security Act (the Act) by establishing the Medicare integrity program (MIP) to carry out Medicare program integrity activities that are funded from the Medicare Trust Funds. Section 1893 expands our contracting authority to allow us to contract with "eligible entities" to perform Medicare program integrity activities. These activities include review of provider and supplier activities, including medical, fraud, and utilization review: cost report audits; Medicare secondary payer determinations; education of providers, suppliers, beneficiaries, and other persons regarding payment integrity and benefit quality assurance issues; and developing and updating a list of durable medical equipment items that are subject to prior authorization. This proposed rule would set forth the definition of eligible entities, services to be procured, competitive requirements based on Federal acquisition regulations and exceptions (guidelines for automatic renewal), procedures for identification, evaluation, and resolution of conflicts of interest, and limitations on contractor liability. In addition, this proposed rule would bring certain sections of the Medicare regulations concerning fiscal intermediaries and carriers into conformity with the Act. The rule would distinguish between those functions that the statute requires be included in agreements with intermediaries and those that may be included in the agreements. It would also provide that some or all of the listed functions may be included in carrier contracts. Currently all these functions are mandatory for carrier contracts. These changes would give us the flexibility to transfer functions from one intermediary or carrier to another or to otherwise limit the functions an intermediary or carrier performs if we determine that to do so would result in more effective and efficient program administration.