DEPARTMENT OF HEALTH & HUMAN SERVICES

The Honorable Sheila Jackson Lee

House of Representatives
Washington, DC 20515
Dear Representative Jackson Lee:
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244-1850
Thank you for your letter requesting that the payment suspension of Riverside General
Hospital's ("Riverside") Medicare payments be removed based on the "good cause" exceptions
found in 42 C.F.R. 405.371(b). In this, as in all payment suspension matters, the Centers for
Medicare and Medicaid Services ("CMS") is acutely aware of the difficulties that such
administrative actions can pose for providers such as Riverside, and so we take our
responsibilities in this regard extremely seriously.
CMS authorized the June 8, 2012 suspension of Riverside's Medicare payments based on
credible allegations of fraud. See 42 C.F.R. 405.371(a)(2). Where a provider has been
suspended based on credible allegations of fraud, CMS may find that good cause exists not to
continue to suspend payments. See 42 C.F.R. 405.371(b). Please note that payment
suspensions can be used to recoup past overpayments, so the continuation of a payment
suspension does not necessarily mean that a provider's current claims are suspect. Thus, when a
provider has in the past committed acts that constitute credible allegations of fraud, as occurred
here, even if the provider has reformed its ways, often the best way to protect the Medicare
program and return potentially fraudulently paid dollars to the Medicare Trust Funds is to impose
a payment suspension against current payments.
In this case, while it is admirable that Riverside reports that it has completely cut ties with an
individual who has been accused of egregious fraud, that does not necessarily change the fact
that Riverside received large improper payments when that individual still worked at Riverside.
As you know, in this case the alleged fraud may have cost U.S. taxpayers many millions of
dollars.
When payment suspensions are at issue, CMS constantly needs to balance the legitimate needs of
honest providers with the harm inflicted on the Medicare Trust Funds and U.S. taxpayers. These
are often difficult judgments to make. In this instance, given the extremely strong evidence of a
large fraud, the balance favors protecting the Program and the taxpayers by means of a payment
suspension. You should understand that under CMS rules, this payment suspension is only a
temporary measure, and will be terminated as soon as the investigation is concluded, and an
overpayment (or, in rare cases, an underpayment) is determined.
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Here, law enforcement has requested that the payment suspension remain in place, because the
matter continues to be under investigation; and, in addition, CMS has made an independent
judgment that there are credible allegations of fraud perpetrated to the benefit of Riverside in the
past.
As you know, it is possible for CMS to lift payment suspensions when it is determined that other
remedies available to CMS would more effectively or quickly protect Medicare funds than a
payment suspension. See 42 C.F.R. 405.371(b)(l)(iii). You had recommended a deferment of
both the payment suspension and prepay review. CMS carefully considered these
recommendations, but continues, nevertheless, to find that payment suspension, in conjunction
with prepay review, to be the most effective means to safeguard the Medicare Trust Funds,
especially in the context of the ongoing Law Enforcement investigation. If Riverside wishes to
explore ways of paying off the amounts received improperly in the past, they should
contact CMS directly; and, in fact, we have informed Riverside of our openness to discussing
alternative ways of satisfying their debt to the Medicare program.
Given that the requisite good cause to lift the payment suspension does not exist, CMS has
determined that the payment suspension will remain in place at this time. However, every 180
days after the initiation of the suspension, CMS will reevaluate whether there is good cause not
to continue the suspension. See 42 C.F.R. 405.37l(b)(2).
I hope this information adequately addresses your concerns regarding the payment suspension of
Riverside General Hospital.
Sincerely,
Ted Doolittle
Deputy Director of Policy