[Federal Register Volume 79, Number 23 (Tuesday, February 4, 2014)]
[Rules and Regulations]
[Pages 6475-6486]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-02166]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 424

[CMS-6046-N]


Medicare, Medicaid, and Children's Health Insurance Programs: 
Announcement of New and Extended Temporary Moratoria on Enrollment of 
Ambulances and Home Health Agencies in Designated Geographic Locations

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Extension and establishment of temporary moratoria.

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SUMMARY: This document announces the imposition of temporary moratoria 
on the enrollment of new ambulance suppliers and home health agencies 
in designated geographic locations to prevent and combat fraud, waste, 
and abuse.

DATES: Effective January 30, 2014.

FOR FURTHER INFORMATION CONTACT: August Nemec, (410) 786-0612. News 
media representatives must contact CMS' Public Affairs Office at (202) 
690-6145 or email them at press@cms.hhs.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

A. CMS' Authority To Impose Temporary Enrollment Moratoria

    Under the Patient Protection and Affordable Care Act (Pub. L. 111-
148), as amended by the Health Care and Education Reconciliation Act of 
2010 (Pub. L. 111-152) (collectively known as the Affordable Care Act), 
the Congress provided the Secretary with new tools and resources to 
combat fraud, waste, and abuse in Medicare, Medicaid, and the 
Children's Health Insurance Program (CHIP). Section 6401(a) of the 
Affordable Care Act added a new section 1866(j)(7) to the Social 
Security Act (the Act) to provide the Secretary with authority to 
impose a temporary moratorium on the enrollment of new Medicare, 
Medicaid or CHIP providers and suppliers, including categories of 
providers and suppliers, if the Secretary determines a moratorium is 
necessary to prevent or combat fraud, waste, or abuse under these 
programs. Section 6401(b) of the Affordable Care Act added specific 
moratorium language applicable to Medicaid at section 1902(kk)(4) of 
the Act, requiring States to comply with any

[[Page 6476]]

moratorium imposed by the Secretary unless the state determines that 
the imposition of such moratorium would adversely impact Medicaid 
beneficiaries' access to care. Section 6401(c) of the Affordable Care 
Act amended section 2107(e)(1) of the Act to provide that all of the 
Medicaid provisions in sections 1902(a)(77) and 1902(kk) are also 
applicable to CHIP.
    In the February 2, 2011 Federal Register (76 FR 5862), CMS 
published a final rule with comment period titled, ``Medicare, 
Medicaid, and Children's Health Insurance Programs; Additional 
Screening Requirements, Application Fees, Temporary Enrollment 
Moratoria, Payment Suspensions and Compliance Plans for Providers and 
Suppliers,'' which implemented section 1866(j)(7) of the Act by 
establishing new regulations at 42 CFR 424.570. Under Sec.  
424.570(a)(2)(i) and (iv), CMS, or CMS in consultation with the 
Department of Health and Human Services' Office of Inspector General 
(HHS-OIG) or the Department of Justice (DOJ), or both, may impose a 
temporary moratorium on newly enrolling Medicare providers and 
suppliers if CMS determines that there is a significant potential for 
fraud, waste, or abuse with respect to a particular provider or 
supplier type or particular geographic locations or both. At Sec.  
424.570(a)(1)(ii), CMS stated that it would announce any temporary 
moratorium in a Federal Register document that includes the rationale 
for the imposition of such moratorium. This document fulfills that 
requirement.
    In accordance with section 1866(j)(7)(B) of the Act, there is no 
judicial review under sections 1869 and 1878 of the Act, or otherwise, 
of the decision to impose a temporary enrollment moratorium. A provider 
or supplier may use the existing appeal procedures at 42 CFR part 498 
to administratively appeal a denial of billing privileges based on the 
imposition of a temporary moratorium, however the scope of any such 
appeal would be limited solely to assessing whether the temporary 
moratorium applies to the provider or supplier appealing the denial. 
Under Sec.  424.570(c), CMS denies the enrollment application of a 
provider or supplier if the provider or supplier is subject to a 
moratorium. If the provider or supplier was required to pay an 
application fee, the application fee will be refunded if the 
application was denied as a result of the imposition of a temporary 
moratorium (see Sec.  424.514(d)(2)(v)(C)).

B. Determination of the Need for a Moratorium

    In imposing these enrollment moratoria, CMS considered both 
qualitative and quantitative factors suggesting a high risk of fraud, 
waste, or abuse. CMS relied on law enforcement's longstanding 
experience with ongoing and emerging fraud trends and activities 
through civil, criminal, and administrative investigations and 
prosecutions. CMS' determination of high risk fraud in these provider 
and supplier types within these geographic locations was then confirmed 
by CMS' data analysis, which relied on factors the agency identified as 
strong indicators of fraud risk.
    Because fraud schemes are highly migratory and transitory in 
nature, many of CMS' program integrity authorities and anti-fraud 
activities are designed to allow the agency to adapt to emerging fraud 
in different locations. The laws and regulations governing CMS' 
moratoria authority give us flexibility to use any and all relevant 
criteria for future moratoria, and CMS may rely on additional or 
different criteria as the basis for future moratoria.
1. Application to Medicaid and the Children's Health Insurance Program 
(CHIP)
    The February 2, 2011 final rule also implemented section 
1902(kk)(4) of the Act, establishing new Medicaid regulations at Sec.  
455.470. Under Sec.  455.470(a)(1) through (3), the Secretary \1\ may 
impose a temporary moratorium, in accordance with Sec.  424.570, on the 
enrollment of new providers or provider types after consulting with any 
affected State Medicaid agencies. The State Medicaid agency will impose 
a temporary moratorium on the enrollment of new providers or provider 
types identified by the Secretary as posing an increased risk to the 
Medicaid program unless the state determines that the imposition of a 
moratorium would adversely affect Medicaid beneficiaries' access to 
medical assistance and so notifies the Secretary. The final rule also 
implemented section 2107(e)(1)(D) of the Act by providing, at Sec.  
457.990 of the regulations, that all of the provisions that apply to 
Medicaid under sections 1902(a)(77) and 1902(kk) of the Act, as well as 
the implementing regulations, also apply to CHIP.
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    \1\ The Secretary has delegated to CMS authority to administer 
Titles XVIII, XIX, and XXI of the Act. For more information, see the 
September 6, 1984 Federal Register (49 FR 35247) and the December 
16, 1997 Federal Register (62 FR 65813).
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    Section 1866(j)(7) of the Act authorizes imposition of a temporary 
enrollment moratorium for Medicare, Medicaid, and/or CHIP, ``if the 
Secretary determines such moratorium is necessary to prevent or combat 
fraud, waste, or abuse under either such program.'' While there may be 
exceptions, CMS believes that generally, a category of providers or 
suppliers that poses a risk to the Medicare program also poses a 
similar risk to Medicaid and CHIP. Many of the new anti-fraud 
provisions in the Affordable Care Act reflect this concept of 
``reciprocal risk'' in which a provider that poses a risk to one 
program poses a risk to the other programs. For example, section 6501 
of the Affordable Care Act titled, ``Termination of Provider 
Participation under Medicaid if Terminated Under Medicare or Other 
State Plan,'' which amends section 1902(a)(39) of the Act, requires 
State Medicaid agencies to terminate the participation of an individual 
or entity if such individual or entity is terminated under Medicare or 
any other State Medicaid plan.\2\ Additional provisions in title VI, 
Subtitles E and F of the Affordable Care Act also support the 
determination that categories of providers and suppliers pose the same 
risk to Medicaid as to Medicare. Section 6401(a) of the Affordable Care 
Act required us to establish levels of screening for categories of 
providers and suppliers based on the risk of fraud, waste, and abuse 
determined by the Secretary. Section 6401(b) of the Affordable Care Act 
required State Medicaid agencies to screen providers and suppliers 
based on the same levels established for the Medicare program. This 
reciprocal concept is also reflected in the Medicare moratoria 
regulations at Sec.  424.570(a)(2)(ii) and (iii), which permit CMS to 
impose a Medicare moratorium based solely on a state imposing a 
Medicaid moratorium. Therefore, CMS has determined that there is a 
reasonable basis for concluding that a category of providers or 
suppliers that poses a risk to Medicare also poses a similar risk to 
Medicaid and CHIP, and that a moratorium in all of these programs is 
necessary to effectively combat this risk.
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    \2\ Although section 6501 of Affordable Care Act does not 
specifically state that individuals or entities that have been 
terminated under Medicare or Medicaid must also be terminated from 
CHIP, CMS has required CHIP, through federal regulation, to take 
similar action regarding termination of a provider that is also 
terminated or had its billing privileges revoked under Medicare or 
any State Medicaid plan.

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[[Page 6477]]

2. Consultation With Law Enforcement
    In consultation with the HHS-OIG and the Department of Justice 
(DOJ), CMS identified two provider and supplier types in five 
geographic locations that warrant a temporary enrollment moratorium. 
CMS reached this determination based in part on the federal 
government's experience with the Health Care Fraud Prevention and 
Enforcement Action Team (HEAT), a joint effort between DOJ and HHS to 
prevent fraud, waste, and abuse in the Medicare and Medicaid programs. 
The Medicare Fraud Strike Force teams are a key component of HEAT and 
operate in nine locations nationwide.\3\ Each HEAT Medicare Fraud 
Strike Force team combines the programmatic and administrative action 
capabilities of CMS, the analytic and investigative resources of the 
FBI and HHS-OIG, and the prosecutorial resources of DOJ's Criminal 
Division's Fraud Section and the United States Attorney's Offices. The 
Strike Force teams use advanced data analysis techniques to identify 
high billing levels in health care fraud hotspots so that interagency 
teams can target emerging or migrating schemes along with chronic fraud 
by criminals masquerading as health care providers or suppliers. The 
locations of the Strike Force teams are identified by analyzing where 
Medicare claims data reveal aberrant billing patterns and intelligence 
data analysis suggests that fraud may be occurring. The presence of a 
Strike Force team within or near a particular geographic area is one 
factor that CMS considered in identifying the locations subject to the 
moratoria announced in this document.
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    \3\ The HEAT Medicare Strike Force operates in Miami, FL; Los 
Angeles, CA: Detroit, MI; Houston, TX; Brooklyn, NY; Southern 
Louisiana (the Strike Force in Southern Louisiana started in Baton 
Rouge and now operates in New Orleans as well); Tampa, FL; Chicago, 
IL; and Dallas, TX.
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    As a part of ongoing antifraud efforts, the HHS-OIG and CMS have 
learned that some fraud schemes are viral, meaning they replicate 
rapidly within communities, and that health care fraud also migrates--
as law enforcement cracks down on a particular scheme, the criminals 
may redesign the scheme or relocate to a new geographic area.\4\ As a 
result, CMS has determined that it is necessary to extend these 
moratoria beyond the target counties to bordering counties, unless 
otherwise noted, to prevent potentially fraudulent providers and 
suppliers from enrolling in a neighboring county with the intent of 
providing services in a moratorium-targeted area. CMS will monitor the 
surrounding counties, as well as the entirety of each affected state, 
by reviewing claims utilization and activity, for indicia of activity 
designed to evade these moratoria. Throughout the duration of these 
moratoria, CMS will continue to consult with law enforcement, to assess 
and address the spread of any significant risk of fraud beyond the 
moratoria locations.
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    \4\ Testimony of the Inspector General, ``Preventing Health Care 
Fraud: New Tools and Approaches to Combat Old Challenges.'' See 
http://www.hhs.gov/asl/testify/2011/03/t20110302i.html.
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3. Data Analysis
    CMS analyzed its own data to determine the extent to which it 
confirms the specific provider and supplier types within geographic 
locations recommended by law enforcement as having a significant 
potential for fraud, waste or abuse, and therefore warranting the 
imposition of enrollment moratoria. CMS identified all counties across 
the nation with 200,000 or more Medicare beneficiaries (``comparison 
counties''), and analyzed certain key metrics, which we believe to be 
strong indicators of potential fraud risk. These metrics included 
factors such as the number of providers or suppliers per 10,000 
Medicare fee-for-service (FFS) beneficiaries and the compounded annual 
growth rate in provider or supplier enrollments. CMS also reviewed the 
2012 FFS Medicare payments to providers and suppliers in the target 
locations based on the average amount spent per beneficiary who used 
services furnished by the targeted provider and supplier types.
    The four locations subject to the temporary enrollment moratoria 
for home health agencies (HHAs) are counties that contain or are 
adjacent to HEAT Medicare Fraud Strike Force locations and are also 
consistently ranked near the top for the identified metrics among 
counties with at least 200,000 Medicare beneficiaries in 2012. See 
Table 1 of this document for a summary of the moratoria locations and 
some of the metrics examined.
4. Beneficiary Access To Care
    Beneficiary access to care in Medicare, Medicaid, and CHIP is of 
critical importance to CMS and its state partners, and CMS carefully 
evaluated access for the five target moratorium locations. To determine 
if the moratoria would create an access to care issue for Medicaid and 
CHIP beneficiaries in the targeted locations and surrounding counties, 
CMS consulted with the appropriate State Medicaid Agencies and with the 
appropriate State Department of Emergency Medical Services. All of CMS' 
state partners were supportive of CMS analysis and proposals, and 
together with CMS, have determined that these moratoria will not create 
access to care issues for Medicaid or CHIP beneficiaries.
    In order to determine if the moratoria would create an access to 
care issue for Medicare beneficiaries, CMS reviewed its own data 
regarding the number of providers and suppliers in the target and 
surrounding counties, and confirmed that there are no reports to CMS of 
access to care issues for these provider and supplier types. This 
conclusion is also supported by recent reports issued by the Medicare 
Payment Advisory Commission (MedPAC), an independent Congressional 
agency established by the Balanced Budget Act of 1997 to advise 
Congress on issues affecting the Medicare program. MedPAC has a 
Congressional mandate to monitor beneficiaries' access to care and 
publishes its review of Medicare expenditures annually. Based on 
MedPAC's March 2013 report (finding no access issues to Medicare home 
health services \5\), and its June 2013 report (finding no access 
issues to Medicare ambulance services \6\), CMS does not believe these 
moratoria will cause an access to care issue for Medicare 
beneficiaries.
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    \5\ MedPAC, March 2013, ``Report to Congress: Medicare Payment 
Policy, Chapter 9 home health services.'' http://www.medpac.gov/documents/Mar13_entirereport.pdf.
    \6\ MedPAC, June 2013, ``Chapter 7, Mandated Report: Medicare 
payment for ambulance services.'' http://www.medpac.gov/chapters/Jun13_Ch07.pdf.
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    In the March 2013 report, MedPAC also recommended that CMS use its 
authorities under current law to examine providers with aberrant 
patterns of utilization for possible fraud and abuse. With regard to 
home health services, MedPAC stated that a moratorium on the enrollment 
of new HHAs would prevent new agencies from entering markets that may 
already be saturated.\7\ CMS will continuously monitor for reductions 
in the number of HHA providers and Part B ambulance suppliers, as well 
as beneficiary complaints, and will continue consultation with the 
states, for any indication of a potential access to care issue.
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    \7\ MedPAC, March 2013, ``Report to Congress: Medicare Payment 
Policy, Chapter 9 home health services.'' http://www.medpac.gov/documents/Mar13_entirereport.pdf.
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5. When a Temporary Moratorium Does Not Apply
    Under Sec.  424.570(a)(1)(iii), a temporary moratorium does not 
apply to changes in practice locations, changes to provider or supplier 
information such as phone number, address, or changes in ownership 
(except changes in

[[Page 6478]]

ownership of HHAs that require initial enrollments under Sec.  
424.550). Also, in accordance with Sec.  424.570(a)(1)(iv), the 
moratorium does not apply to an enrollment application that a CMS 
contractor has already approved, but has not yet entered into the 
Provider Enrollment Chain and Ownership System (PECOS) at the time the 
moratorium is imposed.
6. Lifting a Temporary Moratorium
    In accordance with Sec.  424.570(b), a temporary enrollment 
moratorium imposed by CMS will remain in effect for 6 months. If CMS 
deems it necessary, the moratorium may be extended in 6-month 
increments. CMS will evaluate whether to extend or lift the moratorium 
before the end of the initial 6-month period and, if applicable, any 
subsequent moratorium periods. If one or more of the moratoria 
announced in this document are extended, CMS will publish document of 
such extensions in the Federal Register.
    As provided in Sec.  424.570(d), CMS may lift a moratorium at any 
time if the President declares an area a disaster under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act, if circumstances 
warranting the imposition of a moratorium have abated, if the Secretary 
has declared a public health emergency, or if in the judgment of the 
Secretary, the moratorium is no longer needed.
    Once a moratorium is lifted, the provider or supplier types that 
were unable to enroll because of the moratorium will be designated to 
CMS' high screening level under Sec. Sec.  424.518(c)(3)(iii) and 
455.450(e)(2) for 6 months from the date the moratorium was lifted.

II. Imposition of Home Health Moratoria--Geographic Locations

    Under its authority at Sec.  424.570(a)(2)(i) and (iv), CMS is 
implementing temporary moratoria on the Medicare enrollment of HHAs in 
the geographic locations discussed in this section. Under regulations 
at Sec. Sec.  455.470 and 457.990, these moratoria will also apply to 
the enrollment of HHAs in Medicaid and CHIP.

A. Moratorium on Enrollment of HHAs in the Florida County of Broward

    CMS has determined that there are factors in place that warrant the 
imposition of a temporary Medicare enrollment moratorium for HHAs in 
Broward County (which contains the City of Fort Lauderdale, FL). 
Florida has divided the state into 11 home health ``licensing 
districts,'' that prevent an HHA from providing services outside its 
own licensing district. Broward is the only county in its licensing 
district. In this instance, it is not necessary to extend the 
moratorium to the other counties that border Broward because of the 
state's home health licensing rules that prevent providers enrolling in 
these counties from serving beneficiaries in Broward. CMS has also 
consulted with the State Medicaid Agency and reviewed available data, 
and determined that the moratorium will also apply to Medicaid and 
CHIP.
    Beginning on the effective date of this document, no new HHAs will 
be enrolled into Medicare, Medicaid or CHIP with a practice location in 
the Florida county of Broward, unless their enrollment application has 
already been approved, but not yet entered into PECOS or the State 
Provider/Supplier Enrollment System at the time the moratorium is 
imposed.
1. Consultation With Law Enforcement
    Consistent with Sec.  424.570(a)(2)(iv), CMS has consulted with 
both the HHS-OIG and DOJ regarding the imposition of a moratorium on 
new HHAs in Broward County. Both HHS-OIG and DOJ agree that a 
significant potential for fraud, waste, or abuse exists with respect to 
HHAs in the affected geographic location. Miami-Dade, which is adjacent 
to Broward, is a Strike Force location. CMS has identified these 
counties as the target of program integrity special projects, and 
beneficiaries that reside in these counties are the recipients of 
monthly Medicare Summary Notices due to the high risk of fraud in these 
counties.\8\ The HHS-OIG has previously identified Florida as a state 
that had a high percentage of HHAs with questionable billing.\9\ There 
has also been considerable Strike Force and law enforcement activity in 
this area of the country. In FYs 2012 and 2013, the U.S. Attorney's 
Office for the Southern District of Florida charged 113 defendants in 
51 HHA cases, 55 individuals pled guilty, and there have been 8 trial 
convictions, including cases that involved conduct in Broward. In 
addition to criminal prosecutions, the government has also pursued 
civil fraud enforcement, such as its intervention in July 2013 in a 
whistleblower lawsuit against a home health care company in Fort 
Lauderdale, alleging that the company was engaged in a multi-million 
dollar kickback scheme.\10\ CMS program integrity contractors are also 
actively investigating HHAs in this area.
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    \8\ HHS and DOJ, ``Health Care Fraud and Abuse Control Program 
Annual Report for Fiscal Year 2012.'' See http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2012.pdf.
    \9\ Office of Inspector General Report, ``CMS and Contractor 
Oversight of Home Health Agencies.'' (OEI-04-11-00220). See https://oig.hhs.gov/oei/reports/oei-04-11-00220.pdf. The HHS-OIG defines an 
``HHA fraud-prone area'' as those that are--(1) Strike Force Cities; 
(2) Strike Force cities where individuals have been charged with 
billing potentially fraudulent home health services; and (3) located 
in a state that had a high percentage of HHAs with questionable 
billing identified by the HHS-OIG.
    \10\ Department of Justice, ``US Intervenes in False Claims Act 
Lawsuit Against Fla. Home Health Care Company and Its Owner.'' See 
http://www.justice.gov/opa/pr/2013/July/13-civ-717.html.
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2. Data Analysis
a. Medicare Data Analysis
    CMS' data show that in 2012, there were 31 U.S. counties 
nationally, including Broward, with at least 200,000 Medicare 
beneficiaries. CMS excluded Broward County, FL, New York County, NY, 
Miami-Dade County, FL and Cook County, IL, and used the remaining 27 
counties as ``comparison counties.'' \11\ In the comparison counties, 
there was an average of 5.9 HHAs per 10,000 Medicare FFS beneficiaries. 
In Broward County, there were 11.2 HHAs per 10,000 Medicare FFS 
beneficiaries. This means that the ratio of HHAs to Medicare FFS 
beneficiaries was 89.8 percent greater in Broward County than in the 
comparison counties. Broward had the fifth highest ratio of providers, 
behind locations all also subject to moratoria on HHA enrollment.\12\
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    \11\ CMS's data shows that there are 31 counties that have at 
least 200,000 Medicare beneficiaries. For the home health analysis, 
27 ``comparison counties'' are used. Besides Broward, three other 
counties were excluded from the comparison counties. New York 
County, NY, is excluded due to unique local conditions, such as that 
location's high density, its compact geography, its high real estate 
costs, and the fact that very few HHAs that serve the large number 
of beneficiaries in that location are actually located within New 
York County. We believe that this outlier would have biased the 
average by making it artificially low, and could potentially over-
represent the difference in ratios between the target county and the 
comparison counties. Miami-Dade County, FL and Cook County, IL are 
also excluded because CMS already determined that the data and other 
factors indicated a risk of fraud in those counties, and imposed HHA 
moratoria there on July 30, 2013, which are being extended by way of 
this document.
    \12\ The areas with the highest ratio of providers to Medicare 
FFS beneficiaries are: Miami-Dade County, FL; Dallas County, TX; 
Harris County, TX; and Oakland County, MI.
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    CMS' data show that in 2012, HHAs in Broward County were receiving 
payments of $6,432 per average Medicare home health user per year, 
compared to HHAs in the comparison counties, which received payments of 
$5,387. Payments to HHAs in Broward were 19 percent greater than the 
average for the comparison counties. Broward had the sixth highest 
payments to

[[Page 6479]]

HHAs, behind locations all also subject to the moratoria on HHA 
enrollment.\13\
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    \13\ The areas with the highest payments providers to Medicare 
FFS are: Miami-Dade County, FL; Harris County, TX; Dallas County, 
TX; Tarrant County, TX; and Cook County, IL.
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b. Medicaid Data Analysis
    As discussed previously in section I.B.1. of this document, CMS 
believes that generally, a category of providers or suppliers that 
poses a risk to the Medicare program also poses a similar risk to 
Medicaid and CHIP. In addition, the data also show a significantly 
higher annual utilization of Medicaid home health services in Broward 
County compared to the entire state. CMS compared Broward County 
against the rest of the state rather than against comparison counties 
nationally because Medicaid policies are not necessarily uniform across 
different states. In 2011 \14\ in Broward County, Medicaid paid HHAs an 
average of $281,609 per provider per year, or 95 percent more than the 
average of $144,704 that Medicaid paid to HHAs in the rest of the 
state.
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    \14\ CMS used 2011 data from the Medicaid Statistical 
Information System (MSIS) because it was the most recent data 
available for all three states in this document.
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3. Beneficiary Access to Care
    Based upon CMS' consultation with the State Medicaid agency, CMS 
has concluded that imposing this temporary moratorium will not create 
an access to care issue for Medicaid or CHIP beneficiaries in Broward 
at this time. Accordingly, under Sec. Sec.  455.470 and 457.990, this 
moratorium will apply to the enrollment of HHAs in Medicaid and CHIP, 
unless the State later determines that imposition of the moratorium 
will adversely impact beneficiary access to care and so notifies CMS 
under Sec.  455.470(a)(3).
    CMS reviewed Medicare data for the target county, and found that 
there are no problems with access to HHAs in Broward. Additionally, as 
described in section I.B.4. of this document, MedPAC has not reported 
any problems with Medicare beneficiary access to home health care. 
While CMS has determined there are no access to care issues for 
Medicare beneficiaries, nevertheless, the agency will continuously 
monitor these locations under a moratorium for changes such as an 
increase in beneficiary complaints to ensure that no access to care 
issues arise in the future.

B. Moratorium on Enrollment of HHAs in the Texas Counties of Dallas, 
Collin, Denton, Ellis, Kaufman, Rockwall, and Tarrant

    CMS has determined there are factors in place that warrant the 
imposition of a temporary enrollment moratorium for HHAs in Dallas 
County, TX (which contains the City of Dallas), as well as the six 
surrounding Texas counties--Collin, Denton, Ellis, Kaufman, Rockwall, 
and Tarrant. CMS has determined that it is necessary to extend this 
moratorium to the surrounding counties to prevent potentially 
fraudulent HHAs from enrolling in a neighboring county to avoid the 
moratorium. CMS has consulted with the State Medicaid agency and 
reviewed available data and determined that this moratorium will also 
apply to Medicaid and CHIP.
    Beginning on the effective date of this document, no new HHAs will 
be enrolled into Medicare, Medicaid or CHIP with a practice location in 
the Texas Counties of Dallas, Collin, Denton, Ellis, Kaufman, Rockwall, 
and Tarrant unless their enrollment application has already been 
approved but not yet entered into PECOS or the State Provider/Supplier 
Enrollment System at the time the moratorium is imposed.
1. Consultation With Law Enforcement
    Consistent with Sec.  424.570(a)(2)(iv), CMS has consulted with 
both the HHS-OIG and DOJ regarding the imposition of a moratorium on 
new HHAs in Dallas County, TX and the surrounding counties. Both HHS-
OIG and DOJ agree that a significant potential for fraud, waste, or 
abuse exists with respect to HHAs in the affected geographic locations. 
The HHS-OIG has previously identified Dallas, TX as an HHA fraud-prone 
area because it is a Strike Force location where individuals have been 
charged with billing potentially fraudulent home health services, and 
is located in a State that had a high percentage of HHAs with 
questionable billing identified by the OIG.\15\ There has also been 
considerable Strike Force and law enforcement activity in this area of 
the country. Since February 2011, the Strike Force has filed 4 home 
health fraud cases, and charged 18 individuals that have resulted in 7 
guilty pleas in Dallas county TX. For example, in February 2013, two 
owners of a Dallas, TX home health care agency, were sentenced to 37 
months in federal prison for their roles in a nearly $1.3 million 
health care fraud conspiracy.\16\ In October 2012, a Dallas, TX area 
home health services company owner admitted his role in a $374 million 
home health fraud scheme in which he and others conspired to bill 
Medicare for unnecessary services that were never performed.\17\ In 
February 2012, a Federal grand jury indicted a Dallas, TX area doctor 
and owner of an association of health care providers, along with five 
others, in a $374 million home health care fraud scheme, the largest 
fraud case ever indicted in terms of the amount of loss charged against 
a single doctor.\18\
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    \15\ Office of Inspector General Report, ``CMS and Contractor 
Oversight of Home Health Agencies.'' (OEI-04-11-00220). See https://oig.hhs.gov/oei/reports/oei-04-11-00220.pdf.
    \16\ DOJ, ``Local Home Health Agency Owners are sentenced for 
Roles in Nearly $1.3 million Health Care Fraud Conspiracy.'' See 
http://www.justice.gov/usao/txn/PressRelease/2013/FEB2013/feb21opurum_george_agatha_hcf_sen.html.
    \17\ DOJ, ``Owners of Texas Home Health Services Company Pleads 
Guilty, Admits Role in $374 million fraud scheme.'' See http://www.fbi.gov/dallas/press-releases/2012/owner-of-texas-home-health-services-company-pleads-guilty-admits-role-in-374-million-fraud-scheme.
    \18\ HHS and DOJ, ``Health Care Fraud and Abuse Control Program 
Annual Report for Fiscal Year 2012.'' See http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2012.pdf.
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2. Data Analysis
a. Medicare Data Analysis
    CMS' data show that in 2012, there were 31 U.S. counties 
nationally, including Dallas, TX, with at least 200,000 Medicare 
beneficiaries. CMS excluded Dallas County, TX and three other counties 
as explained previously and used the remaining 27 counties as 
``comparison counties.'' \19\ In 2012, there was an average of 5.2 HHAs 
per 10,000 FFS beneficiaries in the comparison counties. In Dallas 
County, TX, there were 24.4 HHAs per 10,000 Medicare FFS beneficiaries. 
This means that the ratio of HHAs to FFS beneficiaries was 369 percent 
greater in Dallas County, TX than in the comparison counties. Only 
Miami-Dade County, FL had a higher ratio of HHAs to Medicare FFS 
beneficiaries compared to the comparison counties.
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    \19\ See footnote 11 for explanation of the 3 additional 
counties that were excluded for purposes of the HHA comparison 
county analysis.
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    CMS' data show that in 2012, HHAs in Dallas County, TX were 
receiving payments of $7,336 per average home health user per year, 
compared to HHAs in the comparison counties, which received payments of 
$5,312. Payments to HHAs in Dallas County, TX were 38 percent higher 
than the average for HHAs in the comparison counties in 2012. Only 
payments in the counties of Miami-Dade, FL and Harris, TX (which 
contains the City of Houston) were higher in 2012.

[[Page 6480]]

b. Medicaid Data Analysis
    As discussed previously in section I.B.1. of this document, CMS 
believes that generally, a category of providers or suppliers that 
poses a risk to the Medicare program also poses a similar risk to 
Medicaid and CHIP. In addition, the data also show a significantly 
higher annual utilization of Medicaid home health services in Dallas 
County, TX compared to the entire state. CMS compared Dallas County, TX 
against the rest of the state rather than against comparison counties 
nationally because Medicaid policies are not necessarily uniform across 
different states. In 2011 \20\ in Dallas County, TX Medicaid spent an 
average of $3,236 per home health user per year, or 35 percent more 
than the average $2,404 per home health user that Medicaid spent in the 
rest of the state.
---------------------------------------------------------------------------

    \20\ CMS used 2011 data from the Medicaid Statistical 
Information System (MSIS) because it was the most recent data 
available for all three states in this document.
---------------------------------------------------------------------------

3. Beneficiary Access
    Based upon CMS' consultation with the State Medicaid agency, CMS 
has concluded that imposing this temporary moratorium will not create 
an access to care issue for Medicaid or CHIP beneficiaries in Dallas, 
TX or the surrounding counties at this time. Accordingly, under 
Sec. Sec.  455.470 and 457.990, this moratorium will apply to the 
enrollment of HHAs in Medicaid and CHIP, unless the State later 
determines that imposition of the moratorium will adversely impact 
beneficiary access to care and so notifies CMS under Sec.  
455.470(a)(3).
    CMS reviewed Medicare data for the target and surrounding counties, 
and found that there are no problems with access to HHAs in Dallas, TX 
or surrounding counties. Additionally, as described in section I.B.4 of 
this document, MedPAC has not reported any problems with Medicare 
beneficiary access to home health care. While CMS has determined there 
are no access to care issues for Medicare beneficiaries, nevertheless, 
the agency will continuously monitor these locations under a moratorium 
for changes, such as an increase in beneficiary complaints, to ensure 
that no access to care issues arise in the future.

C. Moratorium on Enrollment of HHAs in the Texas Counties of Harris, 
Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and 
Waller

    CMS has determined that the imposition of a temporary enrollment 
moratorium for HHAs that enroll in Medicare, Medicaid or CHIP in Harris 
County, TX (which contains the City of Houston) is warranted, and is 
extending the moratorium to the seven surrounding counties--Brazoria, 
Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller. CMS 
has determined that it is necessary to extend this moratorium to the 
surrounding counties to prevent potentially fraudulent HHAs from 
enrolling in a neighboring county to avoid the moratorium. CMS has also 
consulted with the State Medicaid Agency and reviewed available data 
and has determined that the moratorium will also apply to Medicaid and 
CHIP.
    Beginning on the effective date of this document, no new HHAs will 
be enrolled into Medicare, Medicaid or CHIP with a practice location in 
the Texas Counties of Harris, Brazoria, Chambers, Fort Bend, Galveston, 
Liberty, Montgomery or Waller unless their enrollment application has 
already been approved, but not yet entered into PECOS or the State 
Provider/Supplier Enrollment System at the time the moratorium is 
imposed.
1. Consultation With Law Enforcement
    Consistent with Sec.  424.570(a)(2)(iv), CMS has consulted with 
both the HHS-OIG and DOJ regarding the imposition of a moratorium on 
new Medicare, Medicaid or CHIP HHAs in Harris County, TX and 
surrounding counties. Both the HHS-OIG and DOJ agree that a significant 
potential for fraud, waste or abuse exists with respect to HHAs in the 
affected geographic locations. The HHS-OIG has previously identified 
Houston as an HHA fraud-prone area because it is a Strike Force 
location where individuals have been charged with billing potentially 
fraudulent home health services, and is located in a State that had a 
high percentage of HHAs with questionable billing identified by the 
OIG.\21\ There has also been considerable Strike Force and law 
enforcement activity in this area of the country. Since June 2010, the 
HEAT Strike Force has filed 7 cases in Houston, TX alleging home health 
fraud, and 16 individuals have been charged in connection with these 
cases resulting in 9 guilty pleas and 3 trial conviction. For example, 
in March 2013, a physician was sentenced to 63 months in prison for his 
role in a $17.3 million Medicare home health care fraud scheme.\22\ In 
June 2012, former co-owners of a home health care company were 
sentenced to 9 years in prison for their participation in a $5.2 
million fraud scheme.\23\
---------------------------------------------------------------------------

    \21\ Office of Inspector General Report, ``CMS and Contractor 
Oversight of Home Health Agencies.'' (OEI-04-11-00220). See https://oig.hhs.gov/oei/reports/oei-04-11-00220.pdf.
    \22\ Department of Justice, ``Houston-area Doctor Sentenced to 
63 months in Prison for Role in $17.3 Million Medicare Fraud 
Scheme.'' See http://www.justice.gov/opa/pr/2013/March/13-crm-313.html.
    \23\ HHS and DOJ, ``Health Care Fraud and Abuse Control Program 
Annual Report for Fiscal Year 2012.'' See http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2012.pdf.
---------------------------------------------------------------------------

2. Data Analysis
a. Medicare Data Analysis
    CMS' data show that in 2012, there were 31 U.S. counties 
nationally, including Harris County, TX with at least 200,000 Medicare 
beneficiaries. CMS excluded Harris County, TX and three other counties 
as explained previously and used the remaining 27 counties as 
``comparison counties.'' \24\ In the comparison counties in 2012, there 
was an average of 5.2 HHAs per 10,000 Medicare FFS beneficiaries. In 
Harris County, TX, there were 19.6 HHAs per 10,000 Medicare FFS 
beneficiaries. This means that the ratio of HHAs to Medicare FFS 
beneficiaries was 277 percent greater in Harris County, TX than in the 
comparison counties. Harris County, TX had the third highest ratio of 
HHAs to Medicare FFS beneficiaries compared to the comparison counties, 
behind Miami-Dade, FL and Dallas, TX counties.
---------------------------------------------------------------------------

    \24\ See footnote 11 for explanation of the 3 additional 
counties that were excluded for purposes of the HHA comparison 
county analysis.
---------------------------------------------------------------------------

    CMS' data show that in 2012, HHAs in Harris County, TX were 
receiving payments of $7,631 per average home health user per year, 
compared to HHAs in the comparison counties, which received payments of 
$5,253. Payments to HHAs in Dallas County, TX were 45 percent higher 
than the average for HHAs in comparison counties in 2012, second only 
to Miami-Dade, FL.
b. Medicaid Data Analysis
    As discussed previously in section I.B.1. of this document, CMS 
believes that generally, a category of providers or suppliers that 
poses a risk to the Medicare program also poses a similar risk to 
Medicaid and CHIP. In addition, the data also show a significantly 
higher annual utilization of Medicaid home health services in Harris 
County, TX compared to the entire state. CMS compared Harris County, TX 
against the rest of the state rather than against comparison counties 
nationally because Medicaid policies are not necessarily uniform across 
different states. In

[[Page 6481]]

2011 \25\ in Harris County, TX Medicaid spent an average of $4,251 per 
home health user per year, or 83 percent more than the average of 
$2,324 per home health user that Medicaid spent in the rest of the 
state.
---------------------------------------------------------------------------

    \25\ CMS used 2011 data from the Medicaid Statistical 
Information System (MSIS) because it was the most recent data 
available for all three states in this document.
---------------------------------------------------------------------------

3. Beneficiary Access
    Based upon CMS' consultation with the State Medicaid agency, CMS 
has concluded that imposing this temporary moratorium will not create 
an access to care issue for Medicaid or CHIP beneficiaries in Harris 
County, TX or the surrounding counties at this time. Accordingly, under 
Sec. Sec.  455.470 and 457.990, this moratorium will apply to the 
enrollment of HHAs in Medicaid and CHIP, unless the State later 
determines that imposition of the moratorium will adversely impact 
beneficiary access to care and so notifies CMS under Sec.  
455.470(a)(3).
    CMS reviewed Medicare data for the target and surrounding counties, 
and found that there are no problems with access to HHAs in Harris 
County, TX or surrounding counties. Additionally, as described in 
section I.B.4. of this document, MedPAC has not reported any problems 
with Medicare beneficiary access to home health care. While CMS has 
determined there are no access to care issues for Medicare 
beneficiaries, nevertheless, the agency will continuously monitor these 
locations under a moratorium for changes such as an increase in 
beneficiary complaints to ensure that no access to care issues arise in 
the future.

D. Moratorium on Enrollment of HHAs in the Michigan Counties of Wayne, 
Macomb, Monroe, Oakland, and Washtenaw

    CMS has determined there are factors in place that warrant the 
imposition of a temporary enrollment moratorium for HHAs in Wayne 
County, MI (which contains the City of Detroit), as well as the four 
surrounding counties; Macomb, Monroe, Oakland, and Washtenaw. CMS has 
determined that it is necessary to extend this moratorium to the 
surrounding counties to prevent potentially fraudulent HHAs from 
enrolling in a neighboring county to avoid the moratorium. CMS has also 
consulted with the State Medicaid agency and reviewed available data 
and determined that the temporary moratorium will also apply to 
Medicaid and CHIP.
    Beginning on the effective date of this document, no new HHAs will 
be enrolled into Medicare, Medicaid or CHIP with a practice location in 
the Michigan Counties of Wayne, Macomb, Monroe, Oakland, and Washtenaw 
unless their enrollment application has already been approved but not 
yet entered into PECOS or the State Provider/Supplier Enrollment System 
at the time the moratorium is imposed.
1. Consultation With Law Enforcement
    Consistent with Sec.  424.570(a)(2)(iv), CMS has consulted with 
both the HHS-OIG and DOJ regarding the imposition of a moratorium on 
new HHAs in Wayne County, MI and the surrounding counties. Both HHS-OIG 
and DOJ agree that a significant potential for fraud, waste, or abuse 
exists with respect to HHAs in the affected geographic locations. The 
HHS-OIG has previously identified Detroit has an HHA fraud-prone area 
because it is a Strike Force location where individuals have been 
charged with billing potentially fraudulent home health services, and 
is located in a State that had a high percentage of HHAs with 
questionable billing identified by the OIG.\26\ There has been 
considerable Strike Force and law enforcement activity in this area of 
the country. Since January 2010, the Strike Force filed 14 home health 
fraud cases, and charged 84 individuals that have resulted in 44 guilty 
pleas and 6 trial convictions. For example, in May 2013, a Detroit-area 
home health care agency owner was sentenced to 60 months in prison for 
causing the submission of over $1 million in false and fraudulent 
billing to Medicare as part of a $13.8 million health care fraud 
conspiracy.\27\ In April 2013, an employee of a Detroit medical service 
company pled guilty for her role in a $24 million home health care 
fraud scheme.\28\ Also in April 2013, a federal jury in Detroit 
convicted the office manager of a home health agency for her 
participation in a $5.8 million Medicare fraud scheme.\29\ As of March 
2013, 44 individuals were charged in a health care fraud and drug 
distribution scheme that centered on an allegation that three home 
health agency owners would provide kickbacks, bribes, and other illegal 
benefits to physicians to induce them to write prescriptions for 
patients with Medicare, Medicaid, and private insurance.\30\
---------------------------------------------------------------------------

    \26\ Office of Inspector General Report, ``CMS and Contractor 
Oversight of Home Health Agencies.'' (OEI-04-11-00220). See https://oig.hhs.gov/oei/reports/oei-04-11-00220.pdf.
    \27\ DOJ, ``Detroit Area Home Health Agency Owner Sentenced to 
60 Months for Role in $13 Million Health Care Fraud Scheme.'' See 
http://www.justice.gov/opa/pr/2013/May/13-crm-544.html.
    \28\ Federal Bureau of Investigation, ``Detroit Home Health 
Company Employee Pleads Guilty to Role in Medicare Fraud Scheme.'' 
See http://www.fbi.gov/detroit/press-releases/2013/detroit-home-health-company-employee-pleads-guilty-to-role-in-medicare-fraud-scheme.
    \29\ DOJ, ``Detroit-Area Home Health Agency Office Manager 
Convicted in $5.8 million Medicare Fraud Scheme.'' See http://www.justice.gov/opa/pr/2013/April/13-crm-443.html.
    \30\ DOJ, ``Forty-Four Individuals Indicted in Health Care Fraud 
and Drug Distribution Scheme.'' See http://www.justice.gov/usao/mie/news/2013/2013_3_20_stayreal.html.
---------------------------------------------------------------------------

2. Data Analysis
a. Medicare Data Analysis
    CMS data show that in 2012, there were 31 U.S. counties nationally, 
including Wayne County, MI with at least 200,000 Medicare 
beneficiaries. CMS excluded Wayne County, MI and three other counties 
as explained previously and used the remaining 27 counties as 
``comparison counties.'' \31\ In 2012, there was an average of 5.9 HHAs 
per 10,000 Medicare FFS beneficiaries in the comparison counties. In 
Wayne County, MI there were 7.1 HHAs per 10,000 Medicare FFS 
beneficiaries. This means that the ratio of HHAs to FFS beneficiaries 
was 19 percent greater in Wayne County, MI than in the comparison 
counties.
---------------------------------------------------------------------------

    \31\ See footnote 11 for explanation of the 3 additional 
counties that were excluded for purposes of the HHA comparison 
county analysis.
---------------------------------------------------------------------------

b. Medicaid Data Analysis
    As discussed previously in section I.B.1. of this document, CMS 
believes that generally, a category of providers or suppliers that 
poses a risk to the Medicare program also poses a similar risk to 
Medicaid and CHIP. Additionally, the data also show a significantly 
higher annual utilization of Medicaid home health services in Wayne 
County, MI compared to the entire state. CMS compared Wayne County, MI 
against the rest of the state rather than to comparison counties 
nationally because Medicaid policies are not necessarily uniform across 
different states. In 2011 \32\ in Wayne County, MI Medicaid paid HHAs 
an average of $26,981 per provider per year, or 24 percent more than 
the average of $21,842 that Medicaid paid HHAs in the rest of the 
state.
---------------------------------------------------------------------------

    \32\ CMS used 2011 data from the Medicaid Statistical 
Information System (MSIS) because it was the most recent data 
available for all three states in this document.
---------------------------------------------------------------------------

3. Beneficiary Access
    Based upon CMS' consultation with the State Medicaid agency, CMS 
has concluded that imposing this temporary moratorium will not create 
an access to care issue for Medicaid or CHIP

[[Page 6482]]

beneficiaries in Wayne County, MI or the surrounding counties at this 
time. Accordingly, under Sec. Sec.  455.470 and 457.990, this 
moratorium will apply to the enrollment of HHAs in Medicaid and CHIP, 
unless the State later determines that imposition of the moratorium 
will adversely impact beneficiary access to care and so notifies CMS 
under Sec.  455.470(a)(3).
    CMS reviewed Medicare data for the target and surrounding counties, 
and found that there are no problems with access to HHAs in Wayne 
County, MI or surrounding counties. Additionally, as described in 
section I.B.4. of this document, MedPAC has not reported any problems 
with Medicare beneficiary access to home health care. While CMS has 
determined there are no access to care issues for Medicare 
beneficiaries, nevertheless, the agency will continuously monitor these 
locations under a moratorium for changes such as an increase in 
beneficiary complaints to ensure that no access to care issues arise in 
the future.

III. Imposition of Ambulance Moratorium--Geographic Area

    Under its authority at Sec.  424.570(a)(2)(i) and (iv), CMS is 
implementing a temporary moratorium on the Medicare Part B enrollment 
of ambulance suppliers in the geographic area discussed in this 
section. The moratorium does not apply to provider-based ambulances, 
which are owned and/or operated by a Medicare provider (or furnished 
under arrangement with a provider) such as a hospital, critical access 
hospital, skilled nursing facility, comprehensive outpatient 
rehabilitation facility, home health agency, or hospice program,\33\ 
and are not required to enroll separately as a supplier in Medicare 
Part B.\34\
---------------------------------------------------------------------------

    \33\ Medicare Claims Processing Manual, CMS Pub. No. 100-04, 
Chapter 15, ``Ambulance.'' See http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c15.pdf.
    \34\ Medicare Program Integrity Manual, Chapter 15, Medicare 
Enrollment. See http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/pim83c15.pdf.
---------------------------------------------------------------------------

    Under regulations at Sec. Sec.  455.470 and 457.990, this 
moratorium will also apply to the enrollment of ambulance service 
providers in Medicaid and CHIP. The moratorium does not apply to air 
ambulances attempting to enroll in Medicare, Medicaid or CHIP.

A. Moratorium on Enrollment of Ambulances in the Pennsylvania Counties 
of Philadelphia, Bucks, Delaware, and Montgomery, and the New Jersey 
Counties of Burlington, Camden, and Gloucester

    CMS has determined that there are factors in place that warrant the 
imposition of a temporary enrollment moratorium for ambulance suppliers 
that enroll in Medicare Part B and ambulance providers in Medicaid and 
CHIP in Philadelphia County, PA (which contains the City of 
Philadelphia), as well as the six surrounding counties--the 
Pennsylvania counties of Bucks, Delaware, and Montgomery, and the New 
Jersey counties of Burlington, Camden, and Gloucester. CMS has 
determined that it is necessary to extend this moratorium to the 
surrounding counties to prevent potentially fraudulent ambulance 
suppliers from enrolling in a neighboring county to avoid the 
moratorium. CMS has consulted with the Pennsylvania and New Jersey 
State Medicaid Agencies and reviewed available data, and has determined 
that this moratorium will apply equally to enrollment of ambulance 
suppliers in Medicaid and CHIP.
    Beginning on the effective date of this document, no new ambulance 
suppliers will be enrolled into Medicare, Medicaid or CHIP with a 
practice location in the Pennsylvania Counties of Philadelphia, Bucks, 
Delaware, and Montgomery, and the New Jersey Counties of Burlington, 
Camden, and Gloucester unless their enrollment application has already 
been approved but not yet entered into PECOS or the State Enrollment 
System at the time the moratorium is imposed. The moratorium does not 
apply to air ambulance suppliers or providers attempting to enroll in 
Medicare, Medicaid or CHIP.
1. Consultation With Law Enforcement
    Consistent with Sec.  424.570(a)(2)(iv), CMS has consulted with 
both the HHS-OIG and DOJ regarding the imposition of a moratorium on 
new ambulance suppliers in Philadelphia, PA and surrounding counties. 
Both the HHS-OIG and DOJ agree that a significant potential for fraud, 
waste and abuse exists with respect to ambulance suppliers in the 
affected geographic locations. The HHS-OIG previously found that the 
Medicare ambulance transport benefit may be highly vulnerable to abuse 
in locations with high utilization, such as Philadelphia, PA and 
surrounding locations DOJ prosecuted an operator of an ambulance 
service company, indicted in June 2012, for submitting more than $5.4 
million in false claims to Medicare for medically unnecessary 
transportation of patients by ambulance.\35\ Additionally, in April 
2013, the owner of a Philadelphia ambulance supplier pled guilty to a 
health care fraud scheme that involved billing Medicare for ambulance 
services that were not medically necessary, that were not actually 
provided, or that were induced by illegal kickbacks.\36\ Also in April 
2013, seven people were charged in a $3.6 million health care scheme 
for unnecessary ambulance rides in Philadelphia.\37\
---------------------------------------------------------------------------

    \35\ HHS and DOJ, ``Health Care Fraud and Abuse Control Program 
Annual Report for Fiscal Year 2012.'' See http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2012.pdf.
    \36\ DOJ, ``Owner of Brotherly Love Ambulance Pleads Guilty to 
$2 million Health Care Fraud Scheme.'' See http://www.justice.gov/usao/pae/News/2013/Apr/kuranplea_release.htm.
    \37\ DOJ, ``Seven Charged in Health Care Fraud Scheme.'' See 
http://www.justice.gov/usao/pae/News/2013/Apr/pennchoice_release.htm.
---------------------------------------------------------------------------

2. Data Analysis
a. Medicare Data Analysis
    CMS' data show that in 2012, there were 31 U.S. counties 
nationally, including Philadelphia, PA, with at least 200,000 Medicare 
beneficiaries. CMS excluded Philadelphia County, PA, New York County, 
NY and Harris County, TX and used the remaining 28 counties as 
``comparison counties.'' \38\ In 2012, there was an average of 1.4 
ambulance suppliers per 10,000 Medicare FFS beneficiaries in the 
comparison counties. In Philadelphia County, PA there were 4.8 
ambulance suppliers per 10,000 Medicare FFS beneficiaries. This means 
that the ratio of ambulance suppliers to FFS beneficiaries was 243 
percent greater in Philadelphia County, PA than in the comparison 
counties, the third highest ratio compared to comparison counties.
---------------------------------------------------------------------------

    \38\ CMS' data shows that there are 31 counties that have at 
least 200,000 Medicare beneficiaries. Besides Philadelphia, for the 
ambulance analysis, 2 additional locations were excluded leaving 28 
``comparison counties''. New York County is excluded due to unique 
local conditions, such as New York's high density, its compact 
geography, and its high real estate costs. We believe that this 
outlier would have biased the average by making it artificially low, 
and could potentially over-represent the difference in ratios 
between the target county and the comparison counties. Harris 
County, Texas is also excluded because CMS already determined that 
the data and other factors indicated a risk of ambulance fraud in 
that county, and imposed a moratorium on July 30, 2013, which is 
being extended in this document.
---------------------------------------------------------------------------

    CMS' data show that the compounded average annual growth rate of 
ambulance suppliers in Philadelphia County, PA, is 15 times higher 
compared to the comparison counties'

[[Page 6483]]

annual growth rate of 1 percent, the second highest growth rate 
compared to comparison counties.
    CMS' data show that in 2012, ambulance suppliers in Philadelphia 
County, PA were receiving payments of $1,314 per average ambulance user 
per year, compared to ambulance suppliers in comparison counties, which 
received payments of $803. Payments to ambulance suppliers were 64 
percent higher than the average for comparison counties, and the third 
highest compared to comparison counties.
b. Medicaid Data Analysis
    As discussed previously in section I.B.1. of this document, CMS 
believes that generally, a category of providers or suppliers that 
poses a risk to the Medicare program also poses a similar risk to 
Medicaid and CHIP. In addition, the data also show a significantly 
higher annual utilization of Medicaid ambulance services in 
Philadelphia County, PA compared to the entire state. CMS compared 
Philadelphia County, PA against the rest of the state rather than to 
comparison counties nationally because Medicaid policies are not 
necessarily uniform across different states. In 2011 \39\ in 
Philadelphia County, PA Medicaid paid ambulances an average of $18,254 
per provider per year, or 130 percent more than the average of $7,922 
that Medicaid paid ambulances in the rest of the state.
---------------------------------------------------------------------------

    \39\ CMS used 2011 data from the Medicaid Statistical 
Information System (MSIS) because it was the most recent data 
available for all three states in this document.
---------------------------------------------------------------------------

3. Beneficiary Access
    After consulting with the Pennsylvania and New Jersey State 
Medicaid agencies and the Pennsylvania and New Jersey State Departments 
of Health Emergency Medical Services, and reviewing available data, CMS 
has concluded that imposing this temporary moratorium will not create 
an access to care issue for Medicaid or CHIP beneficiaries in 
Philadelphia County, PA or the surrounding counties at this time. 
Accordingly, under Sec. Sec.  455.470 and 457.990, this moratorium will 
apply to the enrollment of ambulance providers in Medicaid and CHIP, 
unless either or both states later determine(s) that imposition of the 
moratorium will adversely impact beneficiary access to care and so 
notify(ies) CMS under Sec.  455.470(a)(3).
    CMS reviewed Medicare data for the target and surrounding counties, 
and found that there are no problems with access to ambulance suppliers 
in Philadelphia County, PA or surrounding counties. Additionally, as 
described in section I.B.4. of this document, MedPAC has not reported 
any problems with Medicare beneficiary access to ambulance services. 
While CMS has determined that this temporary moratorium will not create 
an access to care issue for Medicare beneficiaries in Philadelphia 
County, PA or the surrounding counties at this time, nevertheless, the 
agency will continuously monitor these locations under a moratorium for 
changes, such as any increase in beneficiary complaints, to ensure that 
no access to care issues arise in the future.

IV. Extension of Home Health Moratoria--Geographic Locations

    In accordance with Sec.  424.570(b), CMS may deem it necessary to 
extend the moratoria in 6-month increments. Under its authority at 
Sec.  424.570(b), CMS is extending the temporary moratoria on the 
Medicare enrollment of HHAs in the geographic locations discussed in 
this section. Under regulations at Sec. Sec.  455.470 and 457.990, this 
moratorium also applies to the enrollment of HHAs in Medicaid and CHIP. 
At Sec.  424.570(b), CMS stated it would publish a Federal Register 
document announcing any extension, and this document fulfills that 
requirement.

A. Moratorium on Enrollment of HHAs in the Florida Counties of Miami-
Dade and Monroe

    In the July 31, 2013 Federal Register (78 FR 46340), CMS published 
a document announcing the imposition of a temporary moratorium on the 
enrollment of new HHAs in the Florida counties of Miami-Dade and 
Monroe, as well as the qualitative and quantitative factors that 
supported CMS' determination of a need for the moratorium. CMS 
consulted with both the HHS-OIG and DOJ regarding the extension of the 
moratorium on new HHAs in Miami-Dade and Monroe counties, and both HHS-
OIG and DOJ agree that a significant potential for fraud, waste and 
abuse continues to exist in this geographic area. Law enforcement 
agencies continue to investigate and prosecute significant fraudulent 
activity relating to home health services in these counties. For 
example, five Miami residents were arrested for their roles in a $48 
million home health scheme on September 25, 2013,\40\ and three home 
health recruiters pled guilty for their role in the same $48 million 
scheme \41\ on September 4 and 26, 2013.\42\ Additionally, two Miami-
Dade County, FL health care clinic owners pled guilty in connection 
with an $8 million health care fraud scheme involving a now-defunct 
home health care company on August 13, 2013.\43\
---------------------------------------------------------------------------

    \40\ http://www.justice.gov/opa/pr/2013/September/13-crm-1071.html.
    \41\ http://www.justice.gov/opa/pr/2013/September/13-crm-985.html.
    \42\ http://www.justice.gov/opa/pr/2013/September/13-crm-1077.html.
    \43\ http://www.fbi.gov/miami/press-releases/2013/health-care-clinic-owners-plead-guilty-in-miami-for-roles-in-8-million-health-care-fraud-scheme.
---------------------------------------------------------------------------

    As stated in the July 31, 2013 Federal Register document, CMS' data 
showed that Miami-Dade County had the highest ratio of HHAs to Medicare 
FFS beneficiaries compared to comparison counties, as well as the 
highest payments to HHAs compared to comparison counties. During the 
first 60 days of the moratorium, CMS revoked the billing privileges of 
14 HHAs, and deactivated the billing privileges of 7 HHAs in Miami-
Dade, FL. CMS has also performed other actions, such as payment 
suspensions and revocation of provider/supplier numbers for HHAs in 
this target area.
    As provided in Sec.  424.570(d), CMS may lift a moratorium at any 
time if the President declares an area a disaster under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act, if circumstances 
warranting the imposition of a moratorium have abated, if the Secretary 
has declared a public health emergency or, if in the judgment of the 
Secretary, the moratorium is no longer needed. Neither Miami-Dade 
County nor Monroe County has been the site of a recent disaster or 
public health emergency. Additionally, the circumstances warranting the 
imposition of the moratorium have not yet abated, and CMS has 
determined that the moratorium is still needed as we monitor the 
indicators described and continue with administrative actions such as 
payment suspensions and revocation of provider/supplier numbers.
    Based upon CMS' consultation with the State Medicaid Agency, CMS 
has concluded that extending this moratorium will not create an access 
to care issue for Medicaid or CHIP beneficiaries in Miami-Dade, FL or 
the surrounding county at this time. CMS also reviewed Medicare data 
for the target and surrounding county and found there are no problems 
with access to HHAs. Additionally, as described in section I.B.4. of 
this document, MedPAC has not reported any problems with Medicare 
beneficiary access to home health care. While CMS has determined there 
are no access to care issues for Medicare beneficiaries, nevertheless, 
the

[[Page 6484]]

agency will continue to monitor these locations.
    As a result of the law enforcement consultation and consideration 
of the factors and activities described, CMS has determined that the 
temporary enrollment moratorium will be extended for 6 months to combat 
fraud in this area.

B. Moratorium on Enrollment of HHAs in the Illinois Counties of Cook, 
DuPage, Kane, Lake, McHenry and Will

    In the July 31, 2013 Federal Register (78 FR 46340), CMS published 
a document announcing the imposition of a temporary moratorium on the 
enrollment of new HHAs in the Illinois Counties of Cook, DuPage, Kane, 
Lake, McHenry and Will, as well as the qualitative and quantitative 
factors that supported CMS' determination of a need of the moratorium.
    CMS consulted with both the HHS-OIG and DOJ regarding the extension 
of the moratorium on new HHAs in Cook and surrounding counties, and 
both HHS-OIG and DOJ agree that a significant potential for fraud, 
waste and abuse continues to exist in this geographic area. We have 
found that law enforcement activities continue. For example, a Chicago 
resident was arrested in connection with an indictment in an alleged 
$12 million home health fraud scheme on October 29, 2013.\44\ In 
another example, nine defendants were indicted in a Chicago home health 
kickback scheme on September 26, 2013.\45\ The CEO of a Chicago home 
health company was arrested and $2.6 million in alleged fraud proceeds 
from various bank accounts were seized on August 27, 2013. A physician 
who was also involved in this same scheme was arrested.\46\
---------------------------------------------------------------------------

    \44\ https://oig.hhs.gov/fraud/enforcement/criminal/.
    \45\ http://www.justice.gov/usao/iln/pr/chicago/2012/pr0925_01.pdf.
    \46\ http://www.fbi.gov/chicago/press-releases/2013/mobile-doctors-chicago-ceo-and-doctor-arrested-on-federal-health-care-fraud-charges.
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    As stated in the July 31, 2013 Federal Register document, CMS' data 
showed that the growth rate in Cook County was double the national 
average of comparison counties, and that payments to HHAs were some of 
the highest nationally compared to the comparison counties. CMS has 
performed administrative actions, including investigations, referrals 
to law enforcement and payment suspensions on HHAs in this target area.
    As provided in Sec.  424.570(d), CMS may lift a moratorium at any 
time if the President declares an area a disaster under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act, if circumstances 
warranting the imposition of a moratorium have abated, if the Secretary 
has declared a public health emergency, or if in the judgment of the 
Secretary, the moratorium is no longer needed. Cook and the surrounding 
counties have not been the site of a recent disaster or public health 
emergency. Additionally, the circumstances warranting the imposition of 
the moratorium have not yet abated, and CMS has determined that the 
moratorium is still needed as we monitor the indicators described and 
continue with administrative actions such as payment suspensions and 
revocations of provider/supplier numbers.
    Based upon CMS' consultation with the State Medicaid Agency, CMS 
concluded that extending this moratorium will not create an access to 
care issue for Medicaid or CHIP beneficiaries in Cook or the 
surrounding counties at this time. CMS also reviewed Medicare data for 
the target and surrounding counties and found there are no problems 
with access to HHAs. Additionally, as described in section I.B.4. of 
this document, MedPAC has not reported any problems with Medicare 
beneficiary access to home health care. While CMS has determined there 
are no access to care issues for Medicare beneficiaries, nevertheless, 
the agency will continue to monitor these locations.
    As a result of the law enforcement consultation and consideration 
of the factors and activities described, CMS has determined that this 
temporary enrollment moratorium will be extended for 6 months to combat 
fraud in this area.

V. Extension of Ambulance Moratoria--Geographic Area

A. Moratorium on the Enrollment of Ambulance Suppliers and Providers in 
the Texas Counties of Harris, Brazoria, Chambers, Fort Bend, Galveston, 
Liberty, Montgomery and Waller

    In the July 31, 2013 Federal Register (78 FR 46340), CMS published 
a document announcing the imposition of this temporary moratorium on 
the enrollment of new ambulance suppliers and providers in the Texas 
Counties of Harris, Brazoria, Chambers, Fort Bend, Galveston, Liberty, 
Montgomery and Waller, as well as the qualitative and quantitative 
factors that supported CMS' determination of a need of the moratorium.
    CMS consulted with both the HHS-OIG and DOJ regarding the extension 
of the moratorium on new ambulances in Harris County, TX and 
surrounding counties, and both HHS-OIG and DOJ agree that a significant 
potential for fraud, waste and abuse continues to exist in this 
geographic area. For example, the owner of a Houston-based ambulance 
company was convicted of multiple counts of health care fraud on 
October 30, 2013.\47\
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    \47\ http://www.yourhoustonnews.com/deer_park/news/owner-of-texas-based-ambulance-service-convicted-of-health-care/article_49a3ed6e-355e-5478-aa99-8d383071d1dc.html.
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    As stated in the July 31, 2013 Federal Register document, CMS' data 
showed that Harris County, TX had the highest ratio of ambulance 
suppliers to Medicare beneficiaries compared to the comparison 
counties, as well as having the highest number of providers not 
continuously billing since 2008--a strong indicator of churn (churn is 
a term used to describe the switching between provider numbers when a 
provider number is identified as being involved in fraud and abuse)--
compared to the comparison counties. In the first 60 days of the 
moratorium, CMS has revoked the billing privileges of 15 ambulance 
suppliers.
    As provided in Sec.  424.570(d), CMS may lift a moratorium at any 
time if the President declares an area a disaster under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act, if circumstances 
warranting the imposition of a moratorium have abated, if the Secretary 
has declared a public health emergency, or if in the judgment of the 
Secretary, the moratorium is no longer needed. Harris County, TX and 
the surrounding counties have not been the site of a recent disaster or 
public health emergency. Additionally, the circumstances warranting the 
imposition of a moratorium have not yet abated, and CMS has determined 
that the moratorium is still needed as we monitor the indicators 
described and continue with administrative actions such as payment 
suspensions and revocations of provider/supplier numbers.
    Based upon CMS' consultation with the State Medicaid Agency, CMS 
concluded that extending this moratorium will not create an access to 
care issue for Medicaid or CHIP beneficiaries in Harris County, TX or 
the surrounding counties at this time. CMS also reviewed Medicare data 
for the target and surrounding counties and found there are no problems 
with access to ambulance services. Additionally, as described in 
section I.B.4. of this document, MedPAC has not reported any problems 
with Medicare beneficiary

[[Page 6485]]

access to ambulance services. While CMS has determined there are no 
access to care issues for Medicare beneficiaries, nevertheless, the 
agency will continue to monitor these locations.
    As a result of the law enforcement consultation and consideration 
of the factors and activities described, CMS has determined that the 
temporary enrollment moratorium will be extended for 6 months to combat 
fraud in these areas.

VI. Summary of the Moratoria Locations

    CMS is executing its authority under sections 1866(j)(7), 
1902(kk)(4), and 2107(e)(1)(D) of the Act to implement a moratorium in 
the following counties for these providers and suppliers:

                                    Table 1--New Home Health Agency Moratoria
----------------------------------------------------------------------------------------------------------------
                                                        Law enforcement      Medicare data       Medicaid data
         City and State                Counties            activity             (2012)              (2011)
----------------------------------------------------------------------------------------------------------------
Fort Lauderdale, FL.............  Broward...........  Adjacent to HEAT    Ratio of HHAs to    HHAs were paid 95
                                                       Miami-Dade Strike   Medicare FFS        percent more per
                                                       Force Location.     Beneficiaries was   year compared to
                                                                           92 percent higher   the rest of the
                                                                           than Comparison     state.
                                                                           Counties.
Detroit, MI.....................  Macomb............  HEAT Strike Force   Compounded annual   HHAs were paid 24
                                  Monroe............   Location.           growth was almost   percent more per
                                  Oakland...........                       double the          year compared to
                                  Washtenaw.........                       national average.   the rest of the
                                  Wayne.............                                           state.
Dallas, TX......................  Collin............  HEAT Strike Force   Ratio of HHAs to    Spent 35 percent
                                  Dallas............   Location.           Medicare FFS        more per home
                                  Denton............                       Beneficiaries was   health user
                                  Ellis.............                       365 percent         compared to the
                                  Kaufman...........                       higher than         rest of the
                                  Rockwall..........                       Comparison          state.
                                  Tarrant...........                       Counties.
Houston, TX.....................  Brazoria Chambers.  HEAT Strike Force   Ratio of HHAs to    Spent 83 percent
                                  Fort Bend            Location.           Medicare FFS        more per home
                                   Galveston.                              Beneficiaries was   health user
                                  Harris............                       276 percent         compared to the
                                  Liberty Montgomery                       higher than         rest of the
                                  Waller............                       Comparison          state.
                                                                           Counties.
----------------------------------------------------------------------------------------------------------------


                                        TABLE 2--New Ambulance Moratorium
----------------------------------------------------------------------------------------------------------------
                                                        Law enforcement      Medicare data       Medicaid data
         City and State                Counties            activity             (2012)              (2011)
----------------------------------------------------------------------------------------------------------------
Philadelphia, PA................  Bucks (PA)........  ..................  Ratio of Ambulance  Ambulances paid
                                  Delaware (PA).....                       Suppliers to        130 percent more
                                  Montgomery (PA)...                       Medicare FFS        per year compared
                                  Philadelphia (PA).                       Beneficiaries was   to the rest of
                                  Burlington (NJ)...                       232 percent         the state.
                                  Camden (NJ).......                       higher than
                                  Gloucester (NJ)...                       Comparison
                                                                           Counties.
----------------------------------------------------------------------------------------------------------------

VII. Regulatory Impact Statement

    CMS has examined the impact of this document as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), the Regulatory Flexibility Act (RFA) 
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social 
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 
(March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism 
(August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for major regulatory 
actions with economically significant effects ($100 million or more in 
any 1 year). This document will prevent the enrollment of new home 
health providers and ambulance suppliers in Medicare, and ambulance 
providers in Medicaid and CHIP. Though savings may accrue by denying 
enrollments, the monetary amount cannot be quantified. After the 
imposition of the moratoria on July 30, 2013, 231 HHAs and 7 ambulance 
companies in all geographic areas affected by the moratoria had their 
applications denied. We have found the number of applications that are 
denied after 60 days declines dramatically, as most providers and 
suppliers will not submit applications during the moratoria period. 
Therefore, this document does not reach the economic threshold and thus 
is not considered a major action.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions. Most hospitals and most other providers and suppliers 
are small entities, either by nonprofit status or by having revenues of 
$7.0 million to $35.5 million in any one year. Individuals and states 
are not included in the definition of a small entity. CMS is not 
preparing an analysis for the RFA because it has determined, and the 
Secretary certifies, that this

[[Page 6486]]

document will not have a significant economic impact on a substantial 
number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if an action may have a significant impact 
on the operations of a substantial number of small rural hospitals. 
This analysis must conform to the provisions of section 604 of the RFA. 
For purposes of section 1102(b) of the Act, CMS defines a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area for Medicare payment regulations and has fewer than 
100 beds. CMS is not preparing an analysis for section 1102(b) of the 
Act because it has determined, and the Secretary certifies, that this 
document will not have a significant impact on the operations of a 
substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any regulatory action whose mandates require spending in any 1 
year of $100 million in 1995 dollars, updated annually for inflation. 
In 2013, that threshold is approximately $141 million. This document 
will have no consequential effect on state, local, or tribal 
governments or on the private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed regulatory action (and 
subsequent final action) that imposes substantial direct requirement 
costs on state and local governments, preempts state law, or otherwise 
has Federalism implications. Since this document does not impose any 
costs on state or local governments, the requirements of Executive 
Order 13132 are not applicable.
    In accordance with the provisions of Executive Order 12866, the 
Office of Management and Budget reviewed this document.

    Authority: Sections 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh) and 44 U.S.C. Chapter 35; Sec. 1103 of the 
Social Security Act (42 U.S.C. 1302).

    Dated: January 27, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2014-02166 Filed 1-30-14; 4:15 pm]
BILLING CODE 4120-01-P