1. A. A provider’s remittance may be withheld or the department may instruct an MCO to withhold payments to a provider if:

   1. 1. an overpayment to the provider may have occurred;
   2. 2. the department has reason to believe an overpayment to the provider may occur;
   3. 3. a provider has failed to cooperate in an investigation or claims review;
   4. 4. a provider attempted to delay or obstruct an investigation or claims review; or
   5. 5. the department has reason to believe the provider used fraudulent or abusive practices.

2. B. Payments to the provider shall be withheld if a prosecuting authority informs the department, in writing, that the provider is under investigation for potential criminal activities relating to a publicly funded healthcare program.

   1. 1. The department may find good cause exists to continue payments to the provider.
   2. 2. The “good cause” determination is within the BHSF director’s and PIU section chief’s discretion. This determination is not subject to an informal hearing or appeal, and the DAL shall not overturn the department’s determination.

   3. 3. “Good cause” reasons to continue payments to a provider include but are not limited to:

      1. a. law enforcement officials request a payment suspension not be imposed because the payment suspension may compromise or jeopardize an investigation;
      2. b. other available remedies more effectively or quickly protect Medicaid funds;
      3. c. the BHSF director and PIU section chief determine, based upon the submission of written evidence by the provider subject to the payment withhold, the withhold should be removed; or

      4. d. recipient access to items or services would be jeopardized by a payment suspension because of any of the following:

         1. i. a provider is the sole community physician or the sole source of essential specialized services in a community;
         2. ii. a provider serves a large number of recipients within a Health Resources and Services Administration(HRSA)designated medically underserved area;
         3. iii. law enforcement declines to certify that a matter continues to be under investigation; or
         4. iv. the BHSF director and PIU section chief determine the withhold is not in the best interest of the Medicaid program.

3. C. Withholding of payments may occur prior to notifying the provider. Withholding due to a credible allegation of fraud shall follow the notice requirements in 42 C.F.R. 455.23(b). For all other payment withholds, the provider shall be notified within five business days of the first withheld payment. The notice shall:

   1. 1. be in writing;
   2. 2. state that payments are being withheld;
   3. 3. state the general allegation or reason forming the basis for the withholding;
   4. 4. state that the withholding is for a temporary period;
   5. 5. cite the circumstances upon which the withholding will be terminated;
   6. 6. inform the provider of their rights to submit written evidence for the department’s consideration; and
   7. 7. inform the provider of their appeal rights.
4. D. Specific information regarding any ongoing investigation or the source of the allegations is not required. If the withholding is based on a criminal investigation, certification from the investigating agency that the investigation is on-going is sufficient to support and maintain the withholding.
5. E. Failure to provide timely notice to the provider may be grounds for overturning the withholding until the deficiency is corrected. This shall not apply if the withholding was at the request of a law enforcement agency.

6. F. All withholdings of payment under this Chapter will be temporary and shall not continue after:

   1. 1. the PIU section chief has determined insufficient information exists to warrant the withholding;
   2. 2. the provider has posted a bond or other security deemed adequate to cover all past and future projected overpayments; or
   3. 3. in the case of a final order of monetary sanction, a sufficient amount has been offset to satisfy the full amount of each monetary sanction.
7. G. In the case of a withholding based on written notification of a criminal investigation or prosecution, the withholding may continue for as long as the criminal investigation or prosecution is active and ongoing.

8. H. The BHSF director and the PIU section chief shall determine the amount of the withholding.

   1. 1. The amount to be withheld may be increased or decreased at any time once a decision to withhold has been made.
   2. 2. The department may consider the provider’s viability to continue operations when determining the amount to withhold.
9. I. In the event a recipient cannot receive needed services from another source, arrangements shall be made to ensure the recipient can receive any medically necessary services. The provider has the burden to demonstrate they are the sole source who can provide services to their recipient(s). This showing shall be made at the informal hearing.
10. J. The provider shall be notified of the amount withheld every 90 calendar days.
11. K. Denial or refusals to pay individual claims as a result of the edit or audit system are not withholdings.

Authority Note

AUTHORITY NOTE: Promulgated in accordance with R.S. 36:254 and 46:437.1-46:440.3.

Historical Note

HISTORICAL NOTE: Promulgated by the Department of Health, Bureau of Health Services Financing, LR 52:697 (May 2026).