Under a rule proposed by CMS in August 2005, providers excluded from the Medicare program could request that CMS act on their behalf to recommend to the OIG that their exclusion from Medicare be waived because of a hardship that would result for Medicare beneficiaries. 70 Fed. Reg. 44,879 (Aug. 4, 2005). The proposed rule establishes general requirements and procedures to implement section 949 of the MMA, which outlines the basis upon which a request for waiver of exclusion must be based.

Background
Section 1128A of the Social Security Act authorizes the Secretary of Health and Human Services to impose civil money penalties, assessments, and exclusion from the Medicare program when providers are disciplined for fraud, misrepresentation, or falsification. The MMA amended section 1128(c)(3)(B) of the Social Security Act to waive the minimum five-year period of exclusion "upon the request of the administrator of a federal health care program who determines that the exclusion would impose a hardship on individuals entitled to benefits under Medicare .the Secretary may, after consulting with the OIG, waive the exclusion with respect to that program in the case of an individual or entity that is the sole community physician or sole source of essential specialized services in the community." The Conference Agreement accompanying the MMA highlighted that a hardship determination must be made before a waiver is approved.

Requirements of Proposed Rule
The proposed rule establishes the requirements and procedures necessary for CMS to make a request to the OIG for a waiver to the exclusion. An excluded provider must submit a written request for a waiver of exclusion to CMS that includes the following:

A copy of the exclusion notice from the OIG;
A statement requesting that CMS present a waiver of exclusion request to the OIG on the provider's behalf;
A statement that the provider is the sole community physician or sole source of essential specialized services in the community; and
Documentation to support the provider's position as sole community physician or sole source of essential specialized services in the community.

The burden of presenting convincing information would be left to the discretion of the provider, but CMS will initiate its own analysis and reserves the authority to require the provider to furnish additional, specific information, and authorization to obtain information from private health insurers, peer review organizations, and others as necessary to determine the validity of all facts presented.

Only upon a finding by CMS that the exclusion of a provider has the effect of posing a hardship to Medicare beneficiaries will CMS consider or make a recommendation to the OIG for waiver of the exclusion. Furthermore, CMS's decision is not subject to administrative or judicial review. Finally, a request made by CMS to the OIG will not automatically grant a waiver to the exclusion. Rather, the OIG will make the final decision.

In July 2004, CMS published a proposed rule delineating the procedures for pursuing exclusions. 69 Fed. Reg. 43,956 (July 23, 2004). CMS has stated that it intends to respond to the public comments in connection with such proposed rule together with this proposed rule in a single final rule.

Although the deadline for comments regarding the proposed rule was October 3, 2005, to date a final rule has not been published.