CMS Pub. 100-04, ch. 28, § 110.1

Representatives of CMS, the Office of the Inspector General (OIG) and the Department

of Justice (DOJ) have consulted to develop a coordinated procedure for the screening,

investigation, and prosecution of cases arising under these penalty provisions.

The Fraud Section, DOJ, has expressed great interest in the prosecution of these cases

and has sent an official communiqué to all U.S. Attorneys addressing the existence and

importance of the Medigap law and alerting them to the probability of referrals of cases

developed jointly by CMS, OIG, and by State Insurance Departments.

A. CMS/OIG Agreement

The CMS and OIG have reached the following agreement as to the division of functional

responsibilities with regard to the screening and investigation of alleged violations of

§1882(d):

1. CMS, through its regional offices, is responsible for the preliminary screening

of complaints and for providing information regarding the complaints to the

appropriate State Insurance Department.

2. The OIG is responsible for the investigation of cases referred by the CMS RO

and for coordinating investigatory activities with the State Insurance

Departments if requested and warranted. Further, OIG will provide any

necessary liaison between State Insurance Departments and the U.S.

Attorneys.

B. CMS RO Responsibilities

Upon receipt of a complaint, the RO sends an informational copy of the complaint and

any supporting documentation to the Regional Office of the Inspector General. The

Special Agents in Charge will serve as the OIG contact point for CMS referrals.

Additionally, the RO sends a copy of the original complaint and any supporting

documentation to the appropriate State Insurance Department. This is to be accompanied

by a request for information as to the status of any State investigation regarding the same

agent or company or the specific case in question.

1. If the State indicates that it is currently investigating, or intends to investigate the

agent or company, the RO provides any information which may be helpful to the

State and advise the State of the existence of the Federal penalty provisions and

the availability of investigatory advice and/or assistance from the Regional Office

of the Inspector General.

If the facts also indicate that a Federal violation may exist, the RO should keep

the file open and request that the State advise them as to the status and,

eventually, the disposition of the case.

If the facts indicate a possible State violation but no Federal violation, the RO out

the case after referring it to the appropriate State Insurance Department.

In either event, the RO should respond to the complainant that the case has been

referred to the State Insurance Department for investigation. The RO sends a copy

of this response to the State, Regional OIG, and to the Medigap Operations Staff

(MOS).

2. Where the State indicates that it does not plan to take action on the case, or where

no response is received from the State within a reasonable period of time, i.e., not

more than 30 days, the RO should proceed to screen the case. This activity

consists of:

● Verifying the facts alleged in the complaint; and

● Determining whether the facts appear to constitute prohibited activity.

3. Where preliminary screening indicates that a mistake of fact exists, or that the

facts do not indicate a Federal violation, the RO should respond to the

complainant and attempt to clarify the misunderstanding. The RO sends a copy of

the RO response to the complainant to MOS, the Special Agent in Charge, and the

appropriate State Insurance Department.

Verification of Facts - The A/B MAC (A, B, HH) or DME MAC logs in complaints as

they are received and establishes appropriate procedures to ensure that follow-up action is

taken on any request for additional information. Verification of facts may include

interviewing the complainant (either by phone or in person, as appropriate) to:

● Determine whether the facts, as originally reported, are accurate and precise;

● Clarify statements that are confusing or contradictory as originally recorded.

● Secure any missing or additional information; and

● Determine whether any similar complaints or additional information may be

derived from others (e.g., relatives or neighbors).

In interviewing the complainant and others, keep in mind the substantive facts that may

lead to prosecution. The MAC uses the suggested format for referral to the Regional OIG

as a checklist for the interview. As far as possible, the RO should keep the complainant

informed of the status of the action taken on the complaint. So as to maintain a high level

of cooperation; inform the complainant when he can expect to be contacted again, who

will contact him, etc.

It is important that the RO not directly contact either the agent or the insurance company

involved since this falls within the purview of investigation and is the function of the

OIG.

Referral to the Regional Office of the Inspector General - When the preliminary

screening process reveals an indication that the Federal law has been violated, refer the

case to the Regional OIG for additional development. The OIG performs the necessary

investigation and coordinates with the appropriate U.S. Attorney for prosecution. At this

point, CMS will cooperate with any request by the U.S. Attorney, State Insurance

Department, and OIG to promote timely and successful prosecution.

If there should be any questions regarding this screening and referral activity, contact the

Director, Medigap Operations Staff at the address below.

Centers for Medicare & Medicaid Services

Director, Medigap Operations Staff

7500 Security Blvd.

Baltimore, Maryland 21244-1850