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Regulation of Medicaid Providers

posted on Tue, Feb 3 2015 2:55 pm by The Network for Public Health Law

For many low-income Americans, Medicaid provides much-needed access to health care. According to, the program provides health coverage to 11 million non-elderly, non-disabled adults, 8.8 million individuals with disabilities, and covers 40 percent of all births in the United States. Medicaid is a joint federal-state program administrated at the state level. Health care providers who service Medicaid recipients receive funds from the program.

The Network was recently contacted by a requestor who asked for information regarding the termination of a Medicaid provider by the Centers for Medicare & Medicaid Services (CMS) in cases of Medicaid fraud, and the consequences of that termination at the state level. Specifically: What federal statute and Code of Federal Regulations (CFR) rules are relied upon by CMS to require state Medicaid programs to exclude or terminate Medicaid providers for cause?

The federal regulation regarding termination of a Medicaid provider, 42 CFR § 455.23, states that “[t]he State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud for which an investigation is pending…unless the agency has good cause to not suspend payments…” and, further, that “[a] provider may request, and must be granted, administrative review where State law so requires.”

According to statutory authorities (42 U.S.C. § 1396a(a)(61))regarding the issue, “the state must demonstrate that it operates a Medicaid fraud and abuse control unit” and § 1396b(q), which defines such a fraud and abuse control unit.

Additionally, the Network pointed the requestor towards the Fraud, Waste & Abuse Toolkit provided by CMS, which contains helpful resources to identify and report common types of medical fraud.

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