Commonwealth of Massachusetts 
Executive Office of Health and Human Services 
Office of Medicaid 

www.mass.gov/masshealth 


MassHealth 
Transmittal Letter ALL-201 
June 2013 

TO: All Providers Participating in MassHealth 

FROM: Julian J. Harris, M.D., Medicaid Director 

RE: All Provider Manuals (Changes to MassHealth Payment Methods for Out-
of-State Acute Hospitals) 

This letter transmits amendments to the MassHealth administrative and 
billing regulations which address certain changes to the payment methods 
and rates for out-of-state acute hospitals. See 130 CMR 450.233(D). These 
changes are effective June 20, 2013. 

Out-of-State Acute Hospital Rates 

Under the amendments, effective June 20, 2013, MassHealth is (i) 
implementing hospital-
specific casemix-adjusted inpatient rates for those out-of-state acute 
hospitals that MassHealth 
determines are High MassHealth Volume and Casemix Hospitals (see Section 
B, below); and 

(ii) making certain changes to the payment methods for out-of-state acute 
hospitals that are not 
High MassHealth Volume and Casemix Hospitals (see Section A, below). 
A “High MassHealth Volume and Casemix Hospital” is defined in the amended 
regulations to 
mean any out-of-state acute hospital provider that, during the prior 
federal fiscal year, had (1) at 
least 150 MassHealth discharges; and (ii) a MassHealth casemix index 
(CMI) higher than the 
average in-state acute hospital CMI, both as determined by MassHealth. 

A. Changes That Apply to Out-of-State Acute Hospital That Are Not High 
MassHealth Volume and Casemix Hospitals 
The regulatory amendments add an inpatient transfer per diem rate that 
will be paid to 
transferring out-of-state acute hospitals for inpatient services if the 
hospital transfers a 
MassHealth inpatient to another acute hospital. The transfer per diem 
rate is capped at 
the transferring hospital’s out-of-state standard payment amount per 
discharge (SPAD).1 
Out-of-state acute hospitals paid a transfer per diem will not also be 
paid an out-of-state 
SPAD. The transfer per diem rate for these out-of-state acute hospitals 
is equal to the instate 
transfer per diem rate that corresponds to the median in-state acute 
hospital 
payment amount per discharge in effect on the date of transfer as 
determined by 
MassHealth, calculated utilizing the in-state acute hospital transfer per 
diem rate 
methodology. 

For MassHealth members under the age of 21, the amendments also change 
the 
method for paying out-of-state acute hospitals for each acute inpatient 
day following the 
first 20 acute days of an admission. The pediatric outlier per diem 
payment will be equal 
to 75% of the transfer per diem rate described above for such hospitals.

1 The payment method for the out-of-state SPAD is not changing for out-
of-state acute hospitals that are not High 
MassHealth Volume and Casemix Hospitals, and continues to equal the 
median payment amount per discharge in 
effect for in-state acute hospitals on the date of admission, as 
determined by MassHealth. The out-of-state SPAD 
pays for the first 20 days of admission. 

MassHealth 
Transmittal Letter ALL-201 
June 2013 
Page 2 

Effective June 20, 2013, the amendments also provide that for inpatient 
or outpatient 
medical services that MassHealth determines are not available in-state, 
an out-of-state 
acute hospital that is not a High MassHealth Volume and Casemix Hospital 
will be paid 
the rate of payment established for the medical service under the other 
state’s Medicaid 
program as determined by MassHealth, or such other rate as MassHealth 
determines 
necessary to ensure member access to services. For an inpatient service 
that 
MassHealth determines is not available in state, payment to the out-of-
state hospital 
under this method may also include acute hospital outpatient services 
that MassHealth 
determines are directly related to the service that is not available in-
state. In order to 
receive payment for these services, the out-of-state acute hospital must 
submit to 
MassHealth a complete list of services, and their corresponding charges, 
that are to be 
performed, and coordinate the case with clinical staff designated by 
MassHealth. 

B. 
Changes That Apply to Out-of-State Acute Hospitals That Are High 
MassHealth 
Volume and Casemix Hospitals 
Effective for admissions (or in the case of per diem payments, dates of 
service) on or 
after June 20, 2013, the regulatory amendments provide for hospital-
specific casemixadjusted 
inpatient rates to those out-of-state acute hospitals that MassHealth 
determines 
are High MassHealth Volume and Casemix Hospitals. The hospital-specific 
out-of-state 
inpatient SPAD, transfer per diem and pediatric outlier per diem rates 
for the High 
MassHealth Volume and Casemix Hospitals are based on MassHealth statewide 
standards and methods utilized for corresponding in-state acute hospital 
rates, 
combined with an estimated casemix based on the hospital’s admissions of 
MassHealth 
members. 

Out-of-state acute hospital rates will be updated each subsequent 
MassHealth hospital rate 
year (HRY). The MassHealth HRY is generally in effect from October 1 
through September 30 
of a given year, and updated rates will be published on the MassHealth 
website at 
www.mass.gov/eohhs/gov/laws-regs/ (click on the link to “MassHealth 
Regulations and 
Publications” and the link to “Special Notices for Hospitals”). 

MassHealth Website 

This transmittal letter and attached pages are available on the 
MassHealth website at 
www.mass.gov/masshealth. 

Questions 

If you have any questions about the information in this transmittal 
letter, please contact 
MassHealth Customer Service at 1-800-841-2900, e-mail your inquiry to 
providersupport@mahealth.net, or fax your inquiry to 617-988-8974. 



 MassHealth 
Transmittal Letter ALL-201 
June 2013 
Page 3 

NEW MATERIAL 
(The pages listed here contain new or revised language.) 
All Provider Manuals 
Pages 2-21 and 2-38 
OBSOLETE MATERIAL 
(The pages listed here are no longer in effect.) 
All Provider Manuals 
Page ii — transmitted by Transmittal Letter ALL-177 
Page ii-a — transmitted by Transmittal Letter ALL-113 
Pages 2-21 and 2-22 — transmitted by Transmittal Letter ALL-194 
Pages 2-23 and 2-24 — transmitted by Transmittal Letter ALL-177 
Pages 2-25 and 2-26 — transmitted by Transmittal Letter ALL-175 
Pages 2-27 through 2-30 — transmitted by Transmittal Letter ALL-192 
Pages 2-31 through 2-36 — transmitted by Transmittal Letter ALL-154 





Commonwealth of Massachusetts 
MassHealth 
Provider Manual Series 
All Provider Manuals 
Subchapter Number and Title 
Table of Contents 
Page 
ii 
Transmittal Letter 
ALL-201 
Date 
06/20/13 

2. Administrative Regulations 

450.200: 
Conflict Between Regulations and Contracts 
................................................... 2-1 


450.201: 
Choice of Provider 
.........................................................................
................... 2-1


 450.202: 
Nondiscrimination 
.........................................................................
.................... 2-1 


450.203: 
Payment in Full 
.........................................................................
......................... 2-2 


450.204: 
Medical 
Necessity................................................................
.............................. 2-2 


450.205: 
Recordkeeping and Disclosure 
.........................................................................
. 2-3 


450.206: 
Determination of Compliance with Medical Standards 
.................................... 2-5 


450.207: 
Utilization Management Program for Acute Inpatient Hospitals 
....................... 2-5 


450.208: 
Utilization Management: Admission Screening for Acute 
Inpatient Hospitals 
.........................................................................
.................... 2-6 

450.209: 
Utilization Management: Prepayment Review for Acute 
Inpatient Hospitals 
.........................................................................
.................... 2-7 

450.210: Pay for Performance Payments: MassHealth Agency 
Review.......................... 2-9 
(130 CMR 450.211 Reserved) 

450.212: 
Provider Eligibility: Eligibility Criteria 
............................................................ 2-11 


450.213: 
Provider Eligibility: Termination of Participation for Ineligibility 
.................. 2-12 


450.214: 
Provider Eligibility: Suspension of Participation Pursuant to 

U.S. Department of Health and Human Services Order 
.................................... 2-12 


450.215: 
Provider Eligibility: Notification of Potential Changes in Eligibility 
.............. 2-12 


450.216: 
Provider Eligibility: Limitations on Participation 
............................................. 2-13 


450.217: Provider Eligibility: Ineligibility of Suspended Providers 
............................... 2-13 
(130 CMR 450.218 through 450.220 Reserved) 

450.221: 
Provider Contract: Definitions 
......................................................................... 
2-14 


450.222: 
Provider Contract: Application for Contract 
..................................................... 2-16 


450.223: 
Provider Contract: Execution of Contract 
......................................................... 2-16 


450.224: Provider Contract: Exclusion and Ineligibility of Convicted 
Parties ................ 2-18 
(130 CMR 450.225 Reserved) 

450.226: 
Provider Contract: Issuance of Provider Numbers 
........................................... 2-19 


450.227: Provider Contract: Termination or Disapproval 
.............................................. 2-19 
(130 CMR 450.228 through 450.230 Reserved) 

450.231: 
General Conditions of Payment 
........................................................................ 
2-20 


450.232: 
Rates of Payment to In-State Providers 
............................................................. 2-21 


450.233: Rates of Payment to Out-of-State Providers 
..................................................... 2-21 
(130 CMR 450.234 Reserved) 

450.235: 
Overpayments 
.........................................................................
........................... 2-23 


450.236: 
Overpayments: Calculation by Sampling 
........................................................ 2-23 


450.237: 
Overpayments: Determination 
......................................................................... 
2-23 


450.238: 
Sanctions: General 
.........................................................................
................... 2-24 


450.239: 
Sanctions: Calculation of Administrative Fine 
................................................ 2-25 


450.240: 
Sanctions: Determination 
.........................................................................
........ 2-25 


450.241: 
Hearings: Claim for an Adjudicatory Hearing 
................................................. 2-26 




Commonwealth of Massachusetts 
MassHealth 
Provider Manual Series 
All Provider Manual 
Subchapter Number and Title 
Table of Contents 
Page 
ii-a 
Transmittal Letter 
All-201 
Date 
06/20/13 

2. ADMINISTRATIVE REGULATIONS (cont.) 

450.242: Hearings: Stay of Suspension or Termination 
.................................................. 2-26 


450.243: Hearings: Consideration of a Claim for an Adjudicatory Hearing 
................... 2-27 


450.244: Hearings: Authority of the Hearing Officer 
...................................................... 2-27 


450.245: Hearings: Burden of Proof 
.........................................................................
...... 2-28 


450.246: Hearings: Procedure 
.........................................................................
................. 2-28 


450.247: Hearings: Hearing Officer’s Decision 
............................................................... 2-28 


450.248: Commissioner’s Decision 
.........................................................................
......... 2-28 


450.249: Withholding of Payments 
.........................................................................
......... 2-28 
(130 CMR 450.250 through 450.258 Reserved) 

450.259: Overpayments Attributable to Rate Adjustments 
.............................................. 2-31 


450.260: Monies Owed by Providers 
.........................................................................
....... 2-31 


450.261: Member and Provider Fraud 
.........................................................................
.... 2-33 
(130 CMR 450.262 through 450.270 Reserved) 

450.271: Individual Consideration 
.........................................................................
........... 2-34 
(130 CMR 450.272 through 450.274 Reserved) 

450.275 Teaching Physicians: Documentation Requirements 
............................................. 2-35 
(130 CMR 450.276 through 450.300 Reserved) 



Commonwealth of Massachusetts 
MassHealth 
Provider Manual Series 
Subchapter Number and Title 
2. Administrative Regulations 
(130 CMR 450.000) 
Page 
2-21 
All Provider Manuals 
Transmittal Letter 
ALL-201 
Date 
06/20/13 

450.232: Rates of Payment to In-State Providers 
Payment to all providers is made in accordance with the payment 
methodology applicable to 

the provider, subject to federal payment limitations. Without limiting 
the generality of the 

foregoing, payment to a Massachusetts in-state noninstitutional provider 
for any medical services 

payable under MassHealth is made in accordance with the applicable 
payment methodology 

established by DHCFP, or the MassHealth agency, subject to any applicable 
federal payment limit 

(see 42 CFR 447.304). 

450.233: Rates of Payment to Out-of-State Providers 
(A) Except as provided in 130 CMR 450.233(D), payment to an out-of-state 
institutional provider 
for any medical service payable under MassHealth is made by the 
MassHealth agency at the lesser 
of 
(1) the rate of payment established for the medical service under the 
other state’s Medicaid 
program; 
(2) the MassHealth rate of payment established for such medical service 
or comparable 
medical service in Massachusetts; or 
(3) the MassHealth rate of payment established for a comparable provider 
in Massachusetts. 
(B) An out-of-state institutional provider, other than an acute hospital, 
must submit to the 
MassHealth agency a copy of the applicable rate schedule under its 
state’s Medicaid program. 
(C) Except as provided in 130 CMR 450.233(D), payment to an out-of-state 
noninstitutional 
provider for any medical service payable under MassHealth is made in 
accordance with the 
applicable fee schedule established by DHCFP or the MassHealth agency, 
subject to any 
applicable federal payment limit (see 42 CFR 447.304). 
(D) Payment to an out-of-state acute hospital provider for any medical 
service payable under 
MassHealth is made as follows. 
(1) Inpatient Services. Except as provided in 130 CMR 450.233(D)(3), out-
of-state acute 
hospitals are paid for inpatient services as specified in 130 CMR 
450.233(D)(1)(a) through 
(c). For purposes of 130 CMR 450.233(D), a “High MassHealth Volume and 
Casemix 
Hospital” means any out-of-state acute hospital provider that, during the 
prior federal fiscal 
year, had (1) at least 150 MassHealth discharges; and (2) a MassHealth 
casemix index (CMI) 
higher than the average in-state acute hospital CMI, both as determined 
by the MassHealth 
agency. 
(a) Payment Amount Per Discharge. Out-of-state acute hospitals are paid a 
standard 
payment amount per discharge for inpatient services, which covers the 
first 20 days of an 
admission (“Out-of-State SPAD”). 
(i) The Out-of-State SPAD for all out-of-state acute hospitals that are 
not High 
MassHealth Volume and Casemix Hospitals is equal to the median payment 
amount 
per discharge in effect for in-state acute hospitals on the date of 
admission as 
determined by the MassHealth agency. 
(ii) The Out-of-State SPAD for each High MassHealth Volume and Casemix 
Hospital is hospital-specific and is calculated based on the in-state 
acute hospital 
methodology, using the in-state statewide average payment amount per 
discharge and 
the statewide weighted average capital cost per discharge amount in 
effect for in-state 
acute hospitals on the date of admission, which is then adjusted by the 
average 
Massachusetts wage area index and the High MassHealth Volume and Casemix 
Hospital’s hospital-specific MassHealth CMI, as determined by the 
MassHealth 
agency for the applicable hospital rate year. 


Commonwealth of Massachusetts 
MassHealth 
Provider Manual Series 
Subchapter Number and Title 
2. Administrative Regulations 
(130 CMR 450.000) 
Page 
2-22 
All Provider Manuals 
Transmittal Letter 
ALL-201 
Date 
06/20/13

 (b) Transfer Per Diem. If an out-of-state acute hospital transfers a 
MassHealth inpatient 
to another acute hospital, the transferring out-of-state acute hospital 
is paid for inpatient 
services provided to that member at a per day transfer per diem rate 
(“Transfer Per 
Diem”), which is capped at the transferring hospital’s Out-of-State SPAD. 
Out-of-state 
acute hospitals that are paid a Transfer Per Diem will not also be paid 
an Out-of-State 
SPAD. 
(i) The Transfer Per Diem rate for out-of-state acute hospitals that are 
not High 
MassHealth Volume and Casemix Hospitals, is equal to the in-state 
transfer per diem 
rate that corresponds to the median in-state acute hospital payment 
amount per 
discharge in effect on the date of transfer as determined by the 
MassHealth agency, 
calculated using the in-state acute hospital transfer per diem rate 
methodology. 
(ii) The Transfer Per Diem rate for each High MassHealth Volume and 
Casemix 
Hospital is hospital-specific, and is calculated based on the hospital’s 
Out-of-State 
SPAD using the same methodology in effect for in-state acute hospitals on 
the date of 
transfer. 
(c) Pediatric Outlier Per Diem. For members under age 21, out-of-state 
acute hospitals 
are paid at the outlier per diem rate for each acute inpatient day 
following the first 20 days 
of admission. 
(i) The pediatric outlier per diem rate for out-of-state acute hospitals 
that are not 
High MassHealth Volume and Casemix Hospitals, is equal to 75% of the 
hospital’s 
Transfer Per Diem rate described in 130 CMR 450.233(D)(1)(b)(i). 
(ii) The pediatric outlier per diem rate for each High MassHealth Volume 
and 
Casemix Hospital is equal to 75% of the High MassHealth Volume and 
Casemix 
Hospital’s Transfer Per Diem rate, described in 130 CMR 
450.233(D)(1)(b)(ii). 
(2) Outpatient Services. Except as provided in 130 CMR 450.233(D)(3), all 
out-of-state acute 
hospital providers are paid for outpatient services at the median payment 
amount per episode 
(PAPE) in effect for in-state acute hospitals on the date of service as 
determined by the 
MassHealth agency, or in accordance with the applicable fee schedule 
established by DHCFP, 
or the MassHealth agency, for services for which in-state acute hospitals 
are not paid the 
PAPE. 
(3) Services Not Available In-State. 
(a) 
For medical services payable by MassHealth that are not available in-
state as 
determined by the MassHealth agency, an out-of-state acute hospital that 
is not a High 
MassHealth Volume and Casemix Hospital will be paid the rate of payment 
established 
for the medical service under the other state’s Medicaid program (or 
equivalent) as 
determined by the MassHealth agency, or such other rate as the MassHealth 
agency 
determines necessary to ensure member access to services. 
(b) For an inpatient service that is not available in-state, as 
determined by the 
MassHealth agency, payment to the out-of-state acute hospital under 130 
CMR 
450.233(D)(3)(a) will also include acute hospital outpatient services 
that the MassHealth 
agency determines are directly related to the service that is not 
available in-state. 
(c) In order to receive payment under 130 CMR 450.233(D)(3), an out-of-
state acute 
hospital provider must 
(i) submit to the MassHealth agency a complete list of services that are 
to be 
performed, along with their corresponding charges; and 
(ii) coordinate the case with clinical staff designated by the MassHealth 
agency. 
(130 CMR 450.234 Reserved) 



Commonwealth of Massachusetts 
MassHealth 
Provider Manual Series 
Subchapter Number and Title 
2. Administrative Regulations 
Page 
2-23 
All Provider Manuals 
Transmittal Letter 
ALL-201 
Date 
06/20/13 

450.235: Overpayments 
Overpayments include, but are not limited to, payments to a provider 

(A) for services that were not actually provided or that were provided to 
a person who was not a 
member on the date of service; 
(B) for services that were not payable under MassHealth on the date of 
service, including services 
that were payable only when provided by a different provider type and 
services that were not 
medically necessary (as defined in 130 CMR 450.204); 
(C) in excess of the maximum amount properly payable for the service 
provided, to the extent of 
such excess; for services for which payment has been or should be 
received from health insurers, 
worker's compensation insurers, other third-party payers, or members; 

(E) for services for which a provider has failed to make, maintain, or 
produce such records, 
prescriptions, and other documentary evidence as required by applicable 
federal and state laws and 
regulations and contracts; 
(F) for services provided when, as of the date of service, the provider 
was not a participating 
provider, or was in any breach or default of the provider contract; 
(G) for services billed that result in a duplicate payment; or 
(H) in an amount that a federal or state agency (other than the 
MassHealth agency) has 
determined to be an overpayment. 
450.236: Overpayments: Calculation by Sampling 
In any action or administrative proceeding to determine or recover 
overpayments, the 

MassHealth agency may ascertain the amount of overpayments by reviewing a 
representative 

sample drawn from the total number of claims paid to a provider during a 
given period and 

extrapolating the results of the review over the entire period. The 
MassHealth agency employs 

statistically valid techniques in establishing the size and distribution 
of the sample to ensure that it 

is a valid and representative sample. 

450.237: Overpayments: Determination 
The existence and amount of overpayment may be determined in an action to 
recover the 

overpayment in any court having jurisdiction. The MassHealth agency may 
also determine the 

existence and amount of overpayments. The procedures described in 130 CMR 
450.236 and 

450.237 do not apply to overpayments resulting from rate adjustments, 
which are governed by 
methods described in 130 CMR 450.259. 
(A) Overpayment Notice. When the MassHealth agency believes that an 
overpayment has been 
made, it notifies the provider in writing of the facts upon which the 
MassHealth agency bases 
its belief, identifying the amount believed to have been overpaid and the 
reasons for 
concluding that such amount constitutes an overpayment. When the 
overpayment amount is 
based on a determination by a federal or state agency (other than the 
MassHealth agency), the 
MassHealth agency will so inform the provider. The MassHealth agency may 
notify the 
provider by letter, draft audit report, computer printout, or other 
format. 


Commonwealth of Massachusetts 
MassHealth 
Provider Manual Series 
Subchapter Number and Title 
2. Administrative Regulations 
Page 
2-24 
All Provider Manuals 
Transmittal Letter 
ALL-201 
Date 
06/20/13 

(B) Timely Reply. To preserve its right to an adjudicatory hearing and 
judicial review, the 
provider must reply in writing to the MassHealth agency and such reply 
must be received by the 
MassHealth agency within 30 calendar days of the date on the overpayment 
notice. The reply must 
specifically identify and address all allegations in the overpayment 
notice with which the provider 
disagrees. With the reply, the provider may submit additional data and 
argument to support its 
claim for payment and must include any documentary evidence it wants the 
MassHealth agency to 
consider. Where the MassHealth agency states in the overpayment notice 
that the overpayment 
amount is based on a determination by a federal or state agency (other 
than the MassHealth 
agency), a provider may contest only the factual assertion that the 
federal or state agency made 
such a determination. The provider may not contest in any proceeding 
before or against the 
MassHealth agency the amount or basis for such determination. 
(C) Overpayment Determination. The MassHealth agency considers and 
reviews only information 
submitted with a timely reply. If, after reviewing the provider’s reply, 
the MassHealth agency 
determines that the provider has been overpaid, the MassHealth agency 
will so notify the provider 
in writing of its final determination, which will state the amount of 
overpayment that the 
MassHealth agency will recover from the provider. 
(D) Adjudicatory Hearing. If the provider submits a timely reply, the 
provider may claim an 
adjudicatory hearing to appeal the MassHealth agency’s final 
determination, in accordance with 
130 CMR 450.241 and 450.243. 
(E) Consequences of Failure to Submit a Timely Reply. The provider has no 
right to an 
adjudicatory hearing if it fails to submit a timely reply. The MassHealth 
agency will take 
appropriate action to recover the overpayment. 
450.238: Sanctions: General 
(A) Introduction. All providers are subject to the rules, regulations, 
standards, and laws governing 
MassHealth. The regulations at 130 CMR 450.238 through 450.240 set forth 
the MassHealth 
agency’s procedures for imposing sanctions for violations of those rules, 
regulations, standards, 
and laws. Such sanctions may include, but are not limited to, 
administrative fines and suspension 
or termination from participation in MassHealth. The MassHealth agency 
determines the amount 
of any fine and may take into account the particular circumstances of the 
violation. The 
MassHealth agency may assess an administrative fine whether or not 
overpayments have been 
identified based on the same set of facts. 
(B) Instances of Violation. Instances of violation include, but are not 
limited to 
(1) billing a member for services that are payable under MassHealth, 
except copayments as 
provided in 130 CMR 450.130; 
(2) submitting claims under an individual provider’s MassHealth provider 
number for 
services for which the provider is entitled to payment from an employer 
or under a contract or 
other agreement; 
(3) billing the MassHealth agency for services provided by someone other 
than the provider, 
unless expressly permitted by the applicable regulations; 
(4) billing the MassHealth agency before delivery of service, unless 
permitted by the 
applicable regulations; 
(5) failing to comply with recordkeeping and disclosure requirements; 
(6) overstating or misrepresenting services, including submitting 
separate claims for services 
or procedures provided as components of a more comprehensive service for 
which a single 
rate of payment is established; 


Commonwealth of Massachusetts 
MassHealth 
Provider Manual Series 
Subchapter Number and Title 
2. Administrative Regulations 
Page 
2-25 
All Provider Manuals 
Transmittal Letter 
ALL-201 
Date 
06/20/13 

(7) failing to return credit balance funds to the MassHealth agency 
within 60 days of their 
receipt; 
(8) failing to obtain or provide a physician's order, prescription, or 
referral when required by 
the applicable regulations; 
(9) failing to comply with MassHealth enrollment, licensure, or 
certification requirements; 
and 
(10) misapplication or misappropriation of personal needs allowance 
funds. 
450.239: Sanctions: Calculation of Administrative Fine 
(A) The MassHealth agency may assess an administrative fine not to exceed 
the greater of 
(1) $100 for each instance of violation of the rules, regulations, 
standards, or laws governing 
MassHealth; 
(2) $100 for each day of violation of the rules, regulations, standards, 
or laws governing 
MassHealth; or 
(3) three times the payable amount of each claim, in accordance with 130 
CMR 450.239. 
(B) In determining the amount of any administrative fine, the MassHealth 
agency considers the 
following factors. 
(1) Nature and Circumstances of the Claim. The MassHealth agency 
considers the 
circumstances to be mitigating if the violations were of the same type 
and occurred within a 
short period of time; there were only a few such instances; there was no 
history of similar 
types of violations; and the total monetary value of these instances was 
less than $1,000. 
Conversely, the MassHealth agency considers the circumstances to be 
aggravating if the 
violations were of a single type or several types and occurred over a 
lengthy period of time; 
there were many such instances; there was a history of similar types of 
violations; and the 
total monetary value of these instances was $1,000 or more. 
(2) Prior Offenses. The MassHealth agency may consider the circumstances 
to be aggravating 
if the provider previously had been held liable for criminal, civil, or 
administrative sanctions 
relating to MassHealth. 
(3) Financial Condition and Member-Access Considerations. The MassHealth 
agency 
considers the circumstances to be mitigating if the imposition of a full 
penalty will jeopardize 
the ability of the provider to continue as a health-care provider and if 
the provider’s inability 
to continue as a health-care provider would result in a demonstrable 
access problem for 
members in the provider’s geographic region. The provider has the burden 
of demonstrating 
such access problem. 
(4) Other Factors. The MassHealth agency will consider other mitigating 
or aggravating 
circumstances. If there are substantial mitigating circumstances, the 
MassHealth agency will 
decrease the administrative fine to be assessed. Conversely, if there are 
substantial 
aggravating circumstances, the MassHealth agency will increase the 
administrative fine to be 
assessed. 
450.240: Sanctions: Determination 
(A) Sanction Notice. When the MassHealth agency believes that sanctions 
should be imposed, 
the MassHealth agency will notify the provider in writing of the alleged 
violations and the 
proposed sanctions. The notice will be sufficiently detailed to 
reasonably inform the provider of 
the acts that the MassHealth agency alleges constitute such violations. 


Commonwealth of Massachusetts 
MassHealth 
Provider Manual Series 
Subchapter Number and Title 
2. Administrative Regulations 
Page 
2-26 
All Provider Manuals 
Transmittal Letter 
ALL-201 
Date 
06/20/13 

(B) Suspension or Termination upon Sanction Notice. If the MassHealth 
agency seeks to suspend 
or terminate a provider’s participation in MassHealth and finds, on the 
basis of information it has 
before it, that a provider’s continued participation during the pendency 
of the administrative 
process could reasonably be expected to endanger the health, safety, or 
welfare of its members or 
compromise the integrity of MassHealth, it may suspend or terminate 
participation at the same 
time the sanction notice described in 130 CMR 450.240(A) is sent to the 
provider. Said suspension 
or termination will remain in effect until either the MassHealth agency, 
pursuant to 130 CMR 
450.240(D), issues a final determination removing or revising said 
suspension or termination, or 
the Medicaid Director, pursuant to 130 CMR 450.248, issues a final agency 
decision removing or 
revising said suspension or termination. 
(C) Timely Reply. To preserve its right to an adjudicatory hearing and 
judicial review, the 
provider must reply in writing to the MassHealth agency and such reply 
must be received by the 
MassHealth agency within 30 calendar days of the date on the sanction 
notice. The reply must 
specifically identify and address all allegations in the sanction notice 
with which the provider 
disagrees and explain any objections to the proposed sanctions. The 
provider must also include 
any additional documentary evidence it wants the MassHealth agency to 
consider. 
(D) Sanction Determination. The MassHealth agency will consider and 
review only information 
submitted with a timely reply. If, after reviewing the provider’s reply, 
the MassHealth agency 
determines that sanctions should be imposed because the provider has 
committed one or more 
violations of any rule, regulation, standard, or law governing 
MassHealth, the MassHealth agency 
will notify the provider in writing of its final determination, which 
will state any sanctions that the 
MassHealth agency will impose against the provider. 
(E) Adjudicatory Hearing. If the provider submits a timely reply, the 
provider may claim an 
adjudicatory hearing to appeal the MassHealth agency’s final 
determination, in accordance with 
130 CMR 450.241 and 450.243. The MassHealth agency may amend or 
supplement the sanction 
notice at any time before the commencement of an adjudicatory hearing as 
long as any additional 
findings have been identified in a notice or amended notice. Once an 
adjudicatory hearing has 
commenced, the hearing officer may permit amendment of the sanction 
determination upon proper 
motion by the MassHealth agency and will permit amendment, where 
necessary, to conform the 
sanction determination to the evidence. 
(F) Consequences of Failure to Submit a Timely Reply. The provider has no 
right to an 
adjudicatory hearing if it fails to submit a timely reply. The MassHealth 
agency will take 
appropriate action to implement the proposed sanctions. 
450.241: Hearings: Claim for an Adjudicatory Hearing 
A provider may challenge the findings set forth in the MassHealth 
agency’s final
determination, issued pursuant to 130 CMR 450.209(C)(3), 450.210(D)(1), 
450.237(C), or 
450.240(D), by filing a claim for an adjudicatory hearing (claim) with 
the Board of Hearings and 
the MassHealth agency within 30 calendar days of the date on the final 
determination, pursuant to 
130 CMR 450.243. A claim is filed on the date actually received by both 
the Board of Hearings 
and the MassHealth agency. Failure to file a timely claim will result in 
implementation of the 
action identified in the final determination. 

450.242: Hearings: Stay of Suspension or Termination 
A timely claim will stay any suspension or termination described in the 
final determination 



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until there has been a final agency action pursuant to 130 CMR 450.243(D) 
or 450.248; provided, 
however, that if the MassHealth agency finds on the basis of information 
it has before it that a 
provider’s continued participation in MassHealth during the pendency of 
the administrative appeal 
could reasonably be expected to endanger the health, safety, or welfare 
of members or 
compromise the integrity of MassHealth, suspension or termination will 
not be stayed. A timely 
claim will not stay any withholding of payments under 130 CMR 450.249. 

450.243: Hearings: Consideration of a Claim for an Adjudicatory Hearing 
(A) A timely claim must specifically identify each issue and fact in 
dispute and state the 
provider's position, the pertinent facts to be adduced at the hearing, 
and the reasons supporting that 
position. 
(B) If a matter has been referred to or is under investigation by, the 
Attorney General’s Medicaid 
Fraud Control Unit or other criminal investigation agency, or if a 
question of quality of care has 
been referred to a professional licensing board for investigation, the 
Board of Hearings, upon 
notice from the MassHealth agency, will postpone the hearing until the 
conclusion of such 
investigation and the final disposition of any criminal complaint, 
indictment, or order to show 
cause that ensues, or until the MassHealth agency notifies the Board to 
schedule the hearing. A 
provider may not request a postponement of the hearing under 130 CMR 
450.243(B). 
(C) The Board of Hearings will grant a hearing only if the claimant 
demonstrates all of the 
following. 
(1) The claim was filed within the time limits set forth in 130 CMR 
450.241. 
(2) There is a genuine and material issue of adjudicative fact for 
resolution. 
(3) The factual issues can be resolved by available and specifically 
identified reliable 
evidence as set forth in M.G.L. c. 30A, §11(2). A hearing will not be 
granted on the basis of 
general allegations or denials or general descriptions of positions and 
contentions. 
(4) The allegations of the provider, if established, would be sufficient 
to resolve a factual 
dispute in the manner urged by the provider. A hearing will not be 
granted if the provider’s 
submissions are insufficient to justify the factual determination urged, 
even if accurate. 
(5) Resolution of the factual dispute in the way sought by the provider 
is relevant to and 
would support the relief sought. 
(D) Failure to comply with the conditions set forth in 130 CMR 450.243(C) 
will result in 
dismissal of the claim. Dismissal of a claim is a final agency action 
reviewable pursuant to M.G.L. 
c. 30A. 
(E) Notwithstanding 130 CMR 450.243(C) and (D), if there is no issue of 
adjudicative fact, but 
the provider has challenged the MassHealth agency’s interpretation or 
application of regulations 
or laws, argument concerning such challenges will be presented in 
memoranda and briefs. 
450.244: Hearings: Authority of the Hearing Officer 
The hearing officer does not render a decision about the legality of 
federal or state laws, 

including, but not limited to MassHealth regulations. If the legality of 
such law or regulation is 

raised by the provider, the hearing officer renders a decision based on 
the applicable law as 

interpreted by the MassHealth agency. Such decision includes a statement 
that the hearing officer 

cannot rule on the legality of such law or regulation and is subject to 
judicial review in accordance 

with M.G.L. c. 30A. 



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450.245: Hearings: Burden of Proof 
The provider has the burden of establishing by a preponderance of the 
evidence that the 

provider has complied with the MassHealth requirements cited in the 
MassHealth agency’s final 

determination or otherwise has correctly received, or is entitled to 
receive, any amounts in dispute. 

450.246: Hearings: Procedure 
The hearing is conducted in accordance with M.G.L. c. 30A, §§ 9, 10, and 
11, and the formal 

rules of the Standard Rules of Practice and Procedure found at 801 CMR 
1.00, 1.01, and 1.03, as 

modified or supplemented by 130 CMR 450.000. 

450.247: Hearings: Hearing Officer's Decision 
The hearing officer's decision is in the form of a proposed decision to 
the commissioner. The 

proposed decision may affirm, modify, or overturn the actions proposed in 
the MassHealth 

agency’s final determination. The proposed decision includes a 
determination of the amount of 

overpayments, if overpayments have been alleged, and a statement of 
reasons for the decision, 

including determination of each issue of fact or law necessary to the 
decision. If the provider 

makes a written request for the proposed decision prior to its issuance, 
the Board of Hearings 

notifies the provider by mail of the proposed decision. The decision of 
the hearing officer is 

effective when and to the extent it is adopted by the commissioner. 

450.248: Commissioner's Decision 
If the provider has made a written request for a copy of the proposed 
decision prior to its 

issuance, the provider has seven calendar days from its receipt of the 
proposed decision to file 

written objections with the commissioner. The commissioner may adopt or 
modify the proposed 

decision, or return the matter to the hearing officer for further 
consideration, based on evidence 

already in the record or, if necessary, additional evidence to be 
included in the reopened record. 

The hearing officer will resubmit the proposed decision to the 
commissioner, as modified pursuant 

to 130 CMR 450.247 and 450.248. The provider is notified of the 
commissioner's action. When 

the commissioner has adopted or modified the proposed decision, the 
commissioner’s decision is a 

final agency action reviewable pursuant to M.G.L. c. 30A. 

450.249: Withholding of Payments 
(A) Introduction. The term "withholding of payments" or “withholding 
payments” as used in 130 
CMR 450.249 means the withholding of all or a portion of payments payable 
to a provider. While 
withholding payments, the MassHealth agency continues to process the 
provider’s claims. To 
avoid rejection of otherwise proper claims because of late submission, a 
provider whose payments 
are being withheld must continue to submit timely claims. 
(B) Withholding Payments from Providers for Overpayments or Other 
Violations. Upon written 
notice to the provider, the MassHealth agency may withhold payments to a 
provider, or any 
provider under common ownership (defined the same as "provider under 
common ownership" in 
130 CMR 450.101), if the MassHealth agency believes that the provider has 
received any 
overpayments or committed any violations. The notice states the effective 
date of the withholding, 
the amount being withheld, and the reason for the withholding. A provider 
subject to a withhold 
may submit written evidence for consideration by the MassHealth agency as 
to why payments in 
whole or in part should not be withheld. The withholding of payments 
expires 90 calendar days 
after the date withholding begins unless the MassHealth agency has sent 
the provider an 
overpayment or sanction notice pursuant to 130 CMR 450.237 or 450.240. 
The withholding of 
payments continues until the entitlement to the withheld funds and the 
amount of overpayment or 


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administrative fines has been finally adjudicated and all due amounts 
have been recovered. 

(C) Withholding Payments for Credible Allegation of Fraud. Upon written 
notice to the provider, 
or without notice as provided for under 42 CFR 455.23(b), the MassHealth 
agency may withhold 
payments to a provider, or to any provider under common ownership 
(defined the same as 
"provider under common ownership" in 130 CMR 450.101), where there is a 
credible allegation of 
fraud under 42 CFR 455.23. The notice complies with 42 CFR 455.23(b) and 
informs the provider 
of the right to submit written evidence for consideration by the 
MassHealth agency as to why 
payments in whole or in part should not be withheld. The withholding of 
payments continues until 
such time as any investigation and associated enforcement proceedings are 
completed, and all due 
amounts have been recovered. If the Attorney General’s Medicaid Fraud 
Division or other law 
enforcement agency declines to accept any fraud referral, any payments 
withheld under 130 CMR 
450.249(C) are released and no further payments are withheld, unless 
within 10 business days of 
the MassHealth agency receiving such notice from the Attorney General’s 
Medicaid Fraud 
Division or other law enforcement agency, the MassHealth agency sends 
written notice to the 
provider in accordance with 130 CMR 450.249(B) that the MassHealth agency 
believes that the 
provider has received any overpayments or committed any violations. 
(D) Withholding Payments to Providers Withdrawing from MassHealth. 
(1) The MassHealth agency may withhold payments to a provider, or to any 
providers under 
common ownership, at any time following receipt by the MassHealth agency 
of notification of 
the provider's intention to close or to withdraw from MassHealth. The 
MassHealth agency 
may withhold such payments whenever the MassHealth agency reasonably 
believes that there 
may be an outstanding issue, claim, or adjustment in connection with or 
incident to any 
payment to the provider. Such payment may be withheld regardless of 
whether the 
outstanding issue, claim, or adjustment is related to that payment. 
Circumstances in which 
there may be an outstanding issue, claim, or adjustment include, without 
limitation: 
(a) an outstanding provider cost report; 
(b) an anticipated or pending audit or utilization review; 
(c) a rate decrease or other payment adjustment; or 
(d) an outstanding or incomplete payment reconciliation. 
(2) The MassHealth agency notifies the provider in writing of the date of 
the withholding, the 
amount withheld, and the reason for the withholding. The withholding of 
payments under 130 
CMR 450.249(D) continue until the provider's entitlement to the withheld 
funds, and all 
outstanding issues, claims, or adjustments in connection with or incident 
to the payments to 
the provider, have been finally adjudicated or otherwise finally 
resolved. During the period 
the MassHealth agency withholds payments under 130 CMR 450.249(D), the 
MassHealth 
agency may recoup or offset all or part of the withheld funds for 
repayment by the provider of 
any liability incurred due to a rate decrease, any recoupment account 
balance owed, or any 
other debt, liability, or account balance owed by the provider. 
(E) Federal Orders to Withhold Payments. If the MassHealth agency 
receives notice from the 
U.S. Department of Health and Human Services of an order for suspension 
of payments to a 
provider under 42 U.S.C. § 1396m or any other section of the Social 
Security Act, the MassHealth 
agency withholds payments otherwise due the provider in accordance with 
the terms of the notice. 
The MassHealth agency promptly notifies the provider of such action and 
the reason for it. The 
MassHealth agency takes such other action as may be necessary or 
appropriate to ameliorate the 
effect of actions taken under 130 CMR 450.249(E) on members and on 
MassHealth, including 
action similar to that described in 130 CMR 450.216. The withholding of 
payments continues until 
the underlying Department of Health and Human Services order is 
rescinded, or becomes final and 
unappealable, at which time apportionment of the withheld amounts between 
the MassHealth 
agency and the provider are made. 


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(F) Continued Provider Participation in the MassHealth Program. 
(1) A provider subject to a withhold under 130 CMR 450.249(B),(C), and 
(E) must continue 
to provide services to MassHealth members as long as the provider 
continues to participate in 
MassHealth. Any provider terminating its participation in MassHealth must 
do so in 
accordance with 130 CMR 450.223(D) and such other statutory, regulatory, 
or contractual 
requirements as may be applicable to the particular provider or provider 
type. 
(2) Any provider that terminates or otherwise discontinues its business 
operations will be 
deemed to be terminating its participation in MassHealth and accordingly 
must comply with 
the requirements stated in 130 CMR 450.249(F)(1). 
(130 CMR 450.250 through 450.258 Reserved) 



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450.259: Overpayments Attributable to Rate Adjustments 
(A) Whenever an overpayment occurs due to a rate adjustment that is 
certified by DHCFP or 
otherwise established by the MassHealth agency in accordance with 
applicable law, the 
MassHealth agency notifies the provider in writing by issuing a 
remittance advice identifying the 
impact of the rate adjustment on all previously paid claims and stating 
the amount of the 
overpayment. 
(B) A provider must pay to the MassHealth agency the full amount of any 
overpayment 
attributable to a rate adjustment within 30 calendar days after the date 
of issuance of a remittance 
advice under 130 CMR 450.259(A), unless the provider enters into a 
payment arrangement with 
the MassHealth agency under 130 CMR 450.260(H). 
(C) If a provider disputes the MassHealth agency’s computation of an 
overpayment attributable to 
a rate adjustment, the provider must submit proposed corrections, 
including a detailed explanation, 
in writing to the MassHealth agency within 30 calendar days after the 
date of issuance of the 
remittance advice under 130 CMR 450.259(A). The fact that any rate 
adjustment certified by 
DHCFP is under appeal is not considered a factor in determining the 
amount of liability. The fact 
that a provider has submitted proposed corrections to the MassHealth 
agency does not delay or 
suspend the provider's payment obligations set forth under 130 CMR 
450.259(B). 
(D) If proposed corrections are timely submitted in accordance with 130 
CMR 450.259(C), the 
MassHealth agency reviews the proposed corrections and notifies the 
provider of its decision 
within 30 calendar days of receipt of the provider's corrections. If the 
MassHealth agency 
determines that corrections are required, the MassHealth agency makes any 
appropriate payment 
adjustments reflecting the corrections. 
(E) A provider must pay the MassHealth agency the full amount of the 
overpayment stated in a 
remittance advice under 130 CMR 450.259(A), regardless of any pending 
appeal, action, or other 
proceeding contesting the overpayment, including but not limited to, any 
appeal, action, or other 
proceeding contesting any rate on which the overpayment is computed. If 
required by a final 
disposition of any such appeal, action, or proceeding, the MassHealth 
agency issues a revised 
remittance advice and makes any appropriate payment adjustments to effect 
the final disposition. 
450.260: Monies Owed by Providers 
(A) Provider Liability. A provider is liable for the prompt payment to 
the MassHealth agency of 
the full amount of any overpayments, or other monies owed under 130 CMR 
450.000 et seq., or 
under any other applicable law or regulation. A provider that is a group 
practice is liable for any 
overpayments owed and subject to sanctions imposed as a result of any 
violation of any statute or 
regulation committed by the individual practitioner that provided the 
service. 
(B) Ownership Liability. Any owner of an institutional provider is liable 
for the monetary 
liability of the institutional provider under 130 CMR 450.260(A) to the 
extent of the owner's 
ownership interest. For purposes of 130 CMR 450.260, an "owner" is a 
person or entity having an 
ownership interest in an institutional provider, as such interest is 
defined in 130 CMR 
450.221(A)(9)(a), (b), (c), or (f). An "institutional provider" is any 
provider that provides nursing 
facility services, or acute, chronic, or rehabilitation hospital 
services. 
(C) Common Ownership Liability. Any two or more providers who are or 
were, at any time, 
wholly or partly owned by the same person or entity, whether 
concurrently, sequentially, or 


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otherwise, are jointly and severally liable for each of their obligations 
to pay the full amount of 
any monies owed under 130 CMR 450.260(A). 

(D) Successor Liability. Any successor owner of a provider is liable for 
the obligation of any 
prior owner to pay the full amount of any monies owed by the prior owner 
under 130 CMR 
450.260(A). For purposes of 130 CMR 450.260, a “successor owner” is any 
successor owner, 
operator, or holder of any right to operate all or a part of the prior 
owner’s health-care business, 
which includes, but is not limited to, the business management, 
personnel, physical location, 
assets, or general business operations. A successor owner of a nursing 
facility, or acute, chronic, 
psychiatric, or rehabilitation hospital includes any successor owner or 
holder of a license to 
operate all or some of the beds of a nursing facility, or acute, chronic, 
psychiatric, or rehabilitation 
hospital. 
(E) Group Practice Liability. The individual practitioner who provided 
the service and the group 
practice will be jointly and severally liable for each of their 
obligations to pay the full amount of 
any monies owed under 130 CMR 450.260. 
(F) Recoupment. If a provider fails to pay the full amount of any monies 
owed under 130 CMR 
450.260(A), the Division may recoup up to 100 percent of any and all 
payments to the provider, 
without further notice or demand, until such time as the full amount of 
any monies owed under 
130 CMR 450.260(A) is paid in full. 
(G) Set-Off. The Division may apply a set-off against payments to a 
provider in the following 
circumstances. 
(1) Providers Under Common Ownership. Whenever any monies are owed by a 
provider 
under 130 CMR 450.260(A), the Division may set off up to 100 percent of 
any and all 
payments to any providers who are or were, at any time, wholly or partly 
owned by the same 
person or entity, whether concurrently, sequentially, or otherwise, 
without further notice or 
demand, until such time as the full amount of the monies owed under 130 
CMR 450.260(A) is 
repaid in full. 
(2) Successors. Upon the sale or transfer of all or part of a provider, 
the Division may set off 
up to 100 percent of any and all payments to any successor owner, without 
further notice or 
demand, until such time as the full amount of any monies owed by any 
prior owner under 130 
CMR 450.260(A) is repaid in full. 
(3) Group Practices. Whenever monies are owed by a group practice under 
130 CMR 
450.260(A), the Division may set off up to 100 percent of any and all 
payments to the 
individual practitioner who provided the service, without further notice 
or demand, until such 
time as the full amount of any monies owed by the group practice under 
130 CMR 
450.260(A) is repaid in full. Whenever monies are owed by an individual 
practitioner who is a 
member of a group practice under 130 CMR 450.260(A), the Division may set 
off up to 100 
percent of any and all payments to the group practice, without further 
notice or demand, until 
such time as the full amount of any monies owed by the individual 
practitioner under 130 
CMR 450.260(A) is repaid in full. 
(H) Payment Arrangements. At its discretion, the Division may enter into 
a written arrangement 
with a provider, its owner, any provider under common ownership, or any 
successor owner to 
establish a schedule to pay to the Division the full amount of any monies 
owed, on such terms as 
are acceptable to the Division. The arrangement may provide for such 
guarantees or collateral as 
may be acceptable to the Division to secure the payment schedule. 
(I) Court Action. The Division may recover the full amount of any monies 
owed to the 


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Division under 130 CMR 450.260(A) by commencing an action in any court of 
competent 
jurisdiction. Such action may be commenced against any parties described 
under 130 CMR 

450.260. 

(J) Joint and Several Obligations. All obligations of any parties 
described under 130 CMR 
450.260, are joint and several. 
450.261: Member and Provider Fraud 
All members and providers must comply with all federal and state laws and 
regulations 

prohibiting fraudulent acts and false reporting, specifically including 
but not limited to 42 U.S.C. 

1320a-7b. 

(130 CMR 450.262 through 450.270 Reserved) 



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450.271: Individual Consideration 
(A) The Division may identify certain services as requiring individual 
consideration (I.C.) in 
program regulations, associated lists of service codes and service 
descriptions, billing instructions, 
provider bulletins, and other written issuances from the Division. For 
services requiring individual 
consideration, the Division will establish the appropriate amount of 
payment based on the 
standards and criteria set forth in 130 CMR 450.271(B). Providers 
claiming payment for any I.C.designated 
service must submit with such claim a report that includes a detailed 
description of the 
service, and is accompanied by supporting documentation that shall 
minimally include where 
applicable, but is not limited to, an operative report, pathology report, 
or in the case of a purchase, 
a copy of the supplier's invoice. The Division does not pay claims for 
"I.C." services unless it is 
satisfied that the report and documentation submitted by the provider are 
adequate to support the 
claim. 
(B) The Division determines the appropriate payment for an I.C. service 
in accordance with the 
following standards and criteria: 
(1) the amount of time required to perform the service; 
(2) the degree of skill required to perform the service; 
(3) the severity and complexity of the member's disease, disorder, or 
disability; 
(4) any applicable relative-value studies; and 
(5) any complications or other circumstances that the Division deems 
relevant. 
(130 CMR 450.272 through 450.274 Reserved) 



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450.275: Teaching Physicians: Documentation Requirements 
In order to be paid for physician services provided in a teaching 
setting, physicians must 
comply with the following documentation requirements. 

(A) Definitions. Whenever one of the following terms is used in 130 CMR 
450.275, it will have 
the meaning given in the definition, unless the context clearly requires 
a different meaning. 
(1) Resident — an individual who participates in an approved Graduate 
Medical Education 
(GME) program, including interns and fellows. A medical student is never 
considered a 
resident. 
(2) Teaching Physician — a physician (not a resident) who involves 
residents in the care of 
his or her patients. Where applicable and appropriate, the use of the 
phrase “teaching 
physician” will be construed to include teaching podiatrists and teaching 
dentists. 
(3) Teaching Setting — a setting in which there is an approved GME 
residency program in 
medicine, osteopathy, dentistry, or podiatry. 
(B) General Requirements. 
(1) Under MassHealth, the Division will pay for physician services (which 
are 
otherwise payable) furnished in teaching settings only if documentation 
in the patient’s 
medical record clearly substantiates that the key portions of the 
services are personally 
provided by a teaching physician, or the key portions of the services, 
which include decision-
making processes, are provided jointly by a teaching physician and 
resident, or by a resident 
in the presence of a teaching physician. (The teaching physician must 
determine which 
portions of the service or procedure are to be considered key and require 
his or her presence.) 
Any contribution of a medical student to the performance of a service or 
procedure must be 
performed in the physical presence of a teaching physician, or jointly 
with a resident. 
(2) The teaching physician may not bill for the supervision of residents. 
The Division 
reimburses for this through its GME reimbursement. 
(3) The teaching physician may not bill for services provided solely by 
residents. 
(C) Documentation. 
(1) The teaching physician and resident are each responsible for 
documenting in the medical 
record his or her own level of involvement in the services. Documentation 
by the resident 
alone is not acceptable. In all cases, the teaching physician must 
personally document his or 
her presence and participation in the services in the medical record. 
This documentation by 
the teaching physician may either be in writing or via a dictated note, 
and may include 
references to notes entered by the resident. 
(2) If the teaching physician would be repeating key elements of the 
service components 
previously documented by the resident (for example, the patient’s 
complete history and 
physical examination), the teaching physician need not repeat the 
documentation of these 
components in detail. In these circumstances, the teaching physician’s 
documentation may be 
brief, summary comments that reflect the resident’s entry and that 
confirm or revise the key 
elements identified. 
(D) Covered Services. Division pays for medical services (including, but 
not limited to, 
evaluation and management services, surgery services, anesthesia 
services, and radiology services) 
performed in a teaching setting if the following requirements are met, in 
addition to the general 
requirements in 130 CMR 450.275(A) through (C): 
(1) Exceptions to Physical-Presence Requirement. For certain services 
(general/internal 
medicine, pediatric, obstetric/gynecologic, and psychiatric), the 
teaching physician does not 
have to be physically present for the key portions of the service. (Refer 
to Appendix K of the 


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Physician Manual for a listing of the service codes for which this 
exception to the physical 
presence requirement applies.) 

(2) Services Paid on the Basis of Time. For services paid on the basis of 
time (excluding 
anesthesia and those psychiatric services listed in Appendix K of the 
Physician Manual), the 
teaching physician must be present for the period of time for which the 
claim is made. Time 
spent by the resident in the absence of the teaching physician may not be 
added to time spent 
by the resident and teaching physician with the member, or time spent by 
the teaching 
physician alone with the member. For example, the Division will pay for a 
code that 
specifically describes a service of from 20 to 30 minutes only if the 
teaching physician is 
present for 20 to 30 minutes. 
(3) Medical Services. For medical services (including, but not limited 
to, evaluation and 
management services), the teaching physician may supervise up to four 
residents at any given 
time, and he or she must direct the care from such proximity as to 
constitute immediate 
physical availability. 
(4) Surgery Services. For surgery services, the teaching physician is 
responsible for the 
preoperative, intra-operative, and postoperative care of the member. The 
teaching physician 
must be scrubbed and physically present during the key portion of the 
surgical procedure. 
During the intra-operative period in which the teaching physician is not 
physically present, he 
or she must remain immediately available to return to the procedure, if 
necessary. He or she 
must not be involved in another procedure from which he or she cannot 
return. If the teaching 
physician leaves the operating room after the key portion(s) of the 
surgical procedure or 
during the closing of the surgical site to become involved in another 
surgical procedure, he or 
she must arrange for another teaching physician to be immediately 
available to intervene as 
needed. The designee must be a physician (excluding a resident) who is 
not involved in or 
immediately available for any other surgical procedure. The following 
guidelines apply to 
specific types of surgery and related services: 
(a) Concurrent Surgeries. To be paid for concurrent surgeries, the 
teaching physician 
must be present during the key portions of both operations. Therefore, 
the key portions 
must not occur simultaneously. When all of the key portions of the first 
procedure have 
been completed, the teaching physician may initiate his or her 
involvement in a second 
procedure. The teaching physician must personally document the key 
portions of both 
procedures in his or her notes to demonstrate that he or she was 
immediately available to 
return to either procedure as needed. 
(b) Straightforward or Low-complexity Procedures. The teaching physician 
must be 
present for the decision-making portions of straightforward or low-
complexity 
procedures. 
(c) Endoscopy Procedures. For procedures performed through an endoscope 
(other than 
endoscopic operations, when the endoscopy performed is not the key 
portion of the 
surgical procedure), the teaching physician must be present during the 
entire viewing. 
The entire viewing includes the period of insertion through removal of 
the device. 
Viewing of the entire procedure through a monitor in another room does 
not meet the 
teaching-physician-presence requirement. 
(d) Obstetrics. To be paid for the procedure, the teaching physician must 
be present for 
the delivery. In situations in which the teaching physician's only 
involvement was at the 
time of delivery, he or she may bill for the delivery only. To be paid 
for the global 
procedures, the teaching physician must be physically present, in 
accordance with the 
general requirements above and applicable program requirements. 
(5) Anesthesia Services. If a teaching anesthesiologist is involved in a 
procedure with a 
resident, or with a resident and a non-physician anesthetist, the 
teaching physician must be 
present for induction and emergence. For any other portion of the 
anesthesia service, the 


Commonwealth of Massachusetts 
MassHealth 
Provider Manual Series 
Subchapter Number and Title 
2. Administrative Regulations 
Page 
2-37 
All Provider Manuals 
Transmittal Letter 
ALL-201 
Date 
06/20/13 

teaching physician must be immediately, physically available to return to 
the procedure, as 
needed. The documentation in the medical records must indicate the 
teaching 
anesthesiologist’s presence and participation in the administration of 
the anesthesia. 

(6) Radiology Services. The interpretation of diagnostic tests must be 
performed or reviewed 
by a teaching physician. If the teaching physician’s signature is the 
only signature on the 
interpretation, this indicates that he or she personally performed the 
interpretation. If a 
resident prepares and signs the interpretation, the teaching physician 
must indicate that he or 
she has personally reviewed both the image and the resident’s 
interpretation and either agrees 
with or edits the findings. The teaching physician’s countersignature 
alone is not acceptable 
documentation. 
(130 CMR 450.276 through 450.300 Reserved) 



Commonwealth of Massachusetts 
MassHealth 
Provider Manual Series 
Subchapter Number and Title 
2. Administrative Regulations 
Page 
2-38 
All Provider Manuals 
Transmittal Letter 
ALL-201 
Date 
06/20/13 

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