[Federal Register Volume 67, Number 163 (Thursday, August 22, 2002)]
[Proposed Rules]
[Pages 54534-54563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-21530]



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Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Parts 400, 405, and 426



Medicare Program: Review of National Coverage Determinations and Local 
Coverage Determinations; Proposed Rule

  Federal Register / Vol. 67, No. 163 / Thursday, August 22, 2002 / 
Proposed Rules  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

42 CFR Parts 400, 405, and 426

[CMS-3063-P]
RIN 0938-AK60


Medicare Program: Review of National Coverage Determinations and 
Local Coverage Determinations

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would create a new process to allow certain 
Medicare beneficiaries to challenge national coverage determinations 
(NCDs) and local coverage determinations (LCDs). It would implement 
portions of section 522 of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000. The right to challenge NCDs and 
LCDs would be distinct from the existing appeal rights that Medicare 
beneficiaries have for the adjudication of Medicare claims.

DATES: We will consider comments if we receive them at the appropriate 
address, as provided below, no later than 5 p.m. on October 21, 2002.

ADDRESSES: In commenting, please refer to file code CMS-3063-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission. Mail written comments (one original and 
three copies) to the following address ONLY:
    Centers for Medicare & Medicaid Services, Department of Health and 
Human Services, Attention: CMS-3063-P, P.O. Box 8017, Baltimore, MD 
21244-8017.
    Please allow sufficient time for mailed comments to be timely 
received in the event of delivery delays.
    If you prefer, you may deliver (by hand or courier) your written 
comments (one original and three copies) to one of the following 
addresses:
    Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, 
SW., Washington, DC 20201, or Room C5-14-03, 7500 Security Boulevard, 
Baltimore, MD 21244-1850.
    (Because access to the interior of the HHH Building is not readily 
available to persons without Federal government identification, 
commenters are encouraged to leave their comments in the CMS drop slots 
located in the main lobby of the building. A stamp-in clock is 
available for commenters wishing to retain a proof of filing by 
stamping in and retaining an extra copy of the comments being filed.)
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and could be considered late.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Vadim Lubarsky, 410-786-0840 for 
National Coverage Determinations. Melanie Combs, 410-786-7683 for Local 
Coverage Determinations.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: Timely 
comments will be available for public inspection as they are received, 
generally beginning approximately 3 weeks after publication of a 
document, at the headquarters of the Centers for Medicare & Medicaid 
Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday 
through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an 
appointment to view public comments, contact Van Ross at (410) 786-
4473.
    To order copies of the Federal Register containing this document, 
send your request to: New Orders, Superintendent of Documents, P.O. Box 
371954, Pittsburgh, PA 15250-7954. Specify the date of the issue 
requested and enclose a check or money order payable to the 
Superintendent of Documents, or enclose your Visa or Master Card number 
and expiration date. Credit card orders can also be placed by calling 
the order desk at (202) 512-1800 (or toll-free at 1-888-293-6498) or by 
faxing to (202) 512-2250. The cost for each copy is $9. As an 
alternative, you can view and photocopy the Federal Register document 
at most libraries designated as Federal Depository Libraries and at 
many other public and academic libraries throughout the country that 
receive the Federal Register.
    This Federal Register document is also available from the Federal 
Register online database through GPO Access, a service of the U.S. 
Government Printing Office. The Web site address is http://www.access.gpo.gov/nara/index.html.

    Note: The former name of the Centers for Medicare & Medicaid 
Services (CMS) was the Health Care Financing Administration (HCFA). 
The terms CMS and HCFA can be used interchangeably.

I. Background

A. Overview of Existing Statutes, Regulations, and Policies

    Medicare is the nation's largest health insurance program covering 
approximately 40 million Americans. Beneficiaries consist primarily of 
individuals 65 years of age or older, some disabled people under 65 
years of age, and people with end-stage renal disease (permanent kidney 
failure treated with dialysis or a transplant).
    The original Medicare program consists of two parts. Part A, known 
as the hospital insurance program, covers certain care provided to 
inpatients in hospitals, critical access hospitals, skilled nursing 
facilities, as well as hospice care and some home health care. Part B, 
the supplementary medical insurance program, covers certain physicians' 
services, outpatient hospital care, and other medical services that are 
not covered under Part A. While the original Medicare program covers 
many health care items and services, it does not cover all health care 
expenses.
    In addition to the original Medicare program, beneficiaries may 
elect to receive health care coverage under the Medicare+Choice (M+C) 
program under Part C of the Medicare program. This program provides 
beneficiaries with various options, including the right to choose a 
Medicare managed care plan or a Medicare private fee-for-service plan. 
Under the M+C program, an individual is entitled to those items and 
services (other than hospice care) for which benefits are available 
under Part A and Part B. An M+C plan may provide additional health care 
items and services that are not covered under the original Medicare 
program.
    The Medicare Act gives beneficiaries specific rights to challenge 
particular types of decisions. CMS is committed to providing 
beneficiaries an opportunity to fully exercise these statutory rights. 
Moreover, we are committed to resolution of these disputes in a fair 
and efficient manner.

B. Claims Appeal Process

    Under the original Medicare program, a beneficiary may generally 
obtain health services from any institution, agency, or person 
qualified to participate in the Medicare program that undertakes to 
provide the service to the individual. Assuming that a qualified 
provider or supplier has furnished medical care, the health care 
provider or supplier, or, in some cases, a beneficiary would submit a 
claim for benefits under the Medicare program. If the claim is for an 
item or service that falls within a Medicare benefit category, is 
reasonable and necessary for the individual, and is not otherwise 
statutorily excluded, then a government contractor, either a fiscal 
intermediary (for claims under Part A or Part B) or a carrier (for 
claims under Part B) would pay the claim. If the Medicare contractor 
determines that the medical care is not covered under the Medicare 
program, however, the Medicare contractor would deny the claim. In

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fiscal year 2001, fee-for-service Medicare contractors adjudicated over 
930 million initial claims and approximately 6.7 million claim appeals.
    Except in a few narrow circumstances, an individual seeking 
Medicare payment for health care items or services cannot obtain an 
advance determination (before obtaining the item or service) on whether 
we would make Medicare payment. The Supreme Court has recognized that 
the Secretary must be given an opportunity to rule on a real claim, 
rather than rendering advisory opinions. See Heckler v. Ringer, 466 
U.S. 602, 621-22 (1984).
    If we deny a claim, we would provide notice to the beneficiary and 
give the beneficiary an opportunity to challenge the decision according 
to procedures we established in our regulations. We established an 
appeals process in our regulations under the fee-for-service program at 
42 CFR part 405, subparts G and H. The statute requires that an 
individual exhaust these remedies before the individual may seek 
judicial review to challenge the Secretary's final decision. For 
purposes of this preamble, we would identify these procedures as the 
``claims appeal process.'' This proposed rule does not seek to 
significantly alter the existing claims appeal process. Nor does this 
proposed rule significantly alter our existing regulations authorizing 
pre-service appeals for M+C beneficiaries as established at 
Secs. 422.560 through 422.622.
    Following exhaustion of these administrative remedies, the Medicare 
statute provides the opportunity for a dissatisfied individual to seek 
review in Federal court. As part of this civil action, a party may 
challenge the validity of a national coverage determination.

C. National Coverage Determinations (NCDs)

    National Coverage Determinations (NCDs) are national policy 
statements that we publish to identify the circumstances under which 
particular services will be considered covered by Medicare. NCDs made 
under section 1862(a)(1) of the Social Security Act (the Act) have been 
nationwide, prospective, population-based policies that apply to 
clinical subsets or classes of Medicare beneficiaries and describe the 
clinical circumstances and settings under which particular services are 
reasonable and necessary (or are not reasonable and necessary). Our 
current regulations at Sec. 405.732 and Sec. 405.860 further recognize 
that the agency also has issued other types of NCDs, often related to 
scope of benefits under other statutory benefit categories that were 
made under ``other applicable provisions of the Act.'' Under our 
existing regulations, both scope of benefits NCDs and the NCDs made 
under section 1862(a)(1)(A) of the Act are controlling authorities for 
Medicare contractors--carriers, fiscal intermediaries (FIs), quality 
improvement organizations (QIOs), formerly known as Peer Review 
Organizations, health maintenance organizations (HMOs), competitive 
medical plans (CMPs), and health care prepayment plans (HCPPs). In 
addition, national coverage decisions are also controlling on M+C 
organizations (see Sec. 422.101). Under our current regulations, only 
NCDs made under section 1862(a)(1) of the Act are controlling 
authorities for administrative law judges.
    The procedures we use to develop NCDs were set forth in a Federal 
Register notice published April 27, 1999 (64 FR 22619 through 22625). 
Section 522 of the Medicare, Medicaid, and SCHIP Benefits Improvement 
and Protection Act of 2000 (BIPA) (Pub. L. 106-554), enacted on 
December 21, 2000 (by creating section 1869(f)(4) of the Act) also 
establishes a revised process by which we would make NCDs in certain 
cases. We would set forth this NCD development process through a 
separate notice in the Federal Register.

D. Local Medical Review Policy (LMRP)

    Local Medical Review Policies (LMRPs) are contractor-specific 
policies that identify the circumstances under which particular items 
or services will be (or will not be) considered covered and correctly 
coded. We authorize certain contractors to make LMRPs and define these 
contractors' LMRP jurisdiction in each contract or task order we enter 
into with a contractor. Each LMRP applies only in the jurisdiction (or 
part of a jurisdiction) of an individual contractor. LMRPs are 
currently developed by carriers, FIs, Durable Medical Equipment 
Regional Carriers (DMERCs), and Regional Home Health Intermediaries 
(RHHIs). The adoption of an LMRP by a contractor, however, does not 
preclude CMS from making an NCD.
    A contractor may adopt an LMRP that has been developed individually 
or collaboratively with other contractors. The adoption of an LMRP 
through a collaborative effort by contractors does not constitute an 
NCD regardless of the number of contractors who decide to adopt the 
LMRP. An LMRP is not controlling authority for administrative law 
judges (ALJs) or the Departmental Appeals Board (Board) in the claims 
appeals process. These guidelines simply help to ensure that similar 
claims are processed in a consistent manner within those jurisdictions. 
LMRPs may not conflict with an NCD, but may be written in the absence 
of, or as an adjunct to, an NCD.
    The Secretary instructs contractors on the procedures to be used in 
developing LMRPs and does so in program instructions. (See http://www.cms.hhs.gov/manuals/108_pim/pim83c13.asp#sect4) to review the 
current requirements regarding when contractors should develop LMRPs.) 
In addition, the Secretary has the authority to prescribe the criteria 
contractors will use when writing the medical necessity provisions in 
their LMRPs. (See http://www.cms.hhs.gov/manuals/108_pim/pim83c13.asp#sect5.1). Finally, the Secretary defines the process 
requirements contractors must follow in order to ensure that all 
interested parties--including beneficiaries, providers, manufacturers, 
associations, advocacy groups, and other members of the public--are 
afforded an opportunity to review and comment on most LMRPs before they 
become final. (See http://www.cms.hhs.gov/manuals/108_pim/pimc13.asp#sec7.4)
    An LMRP may contain any or all of the following:
     Coding provisions.
     Benefit category provisions.
     Statutory exclusion provisions.
     Medical necessity provisions (provisions related to the 
authority under section 1862(a)(1)(A) of the Act, which prohibits 
payment for any expenses incurred for services that are not reasonable 
and necessary (often called the ``medical necessity'' provision.))
    Some LMRPs contain only a single type of provision, while other 
LMRPs contain all four types. The provisions described in bullets two 
through four above constitute coverage provisions.

E. Differences Between NCDs and LMRPs

    Under our claims appeals process, ALJs are not bound by LMRPs. 
Thus, an ALJ may rule that Medicare payment is due on a particular item 
or service received by a beneficiary, even if the contractor's LMRP 
clearly prohibited payment for the particular service. On the other 
hand, contractors and ALJs are bound by NCDs. ALJs may not review an 
NCD.

F. Individual Claim Determinations

    It is important to note that contractors make individual claim 
determinations, even in the absence of an NCD or LMRP.

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In these circumstances when there is no published policy on a 
particular topic, decisions are made based on the individual's 
particular factual situation. See Heckler v. Ringer, 466 U.S. at 617 
(recognizing that the Secretary has discretion to either establish a 
generally applicable rule or to allow individual adjudication).

II. Impact of Section 522 of the Medicare, Medicaid, and SCHIP 
Benefits Improvement and Protection Act of 2000

A. Overview of the Legislation

    Section 522 of BIPA created a new administrative review process 
that enables certain beneficiaries to challenge local coverage 
determinations (LCDs) and NCDs. These appeal rights are distinct from 
the existing appeal rights for the adjudication of Medicare claims. 
This section also creates additional avenues for beneficiaries to seek 
judicial review. Before BIPA, the statute did not provide an 
administrative avenue to challenge the facial validity of NCDs or 
LMRPs. BIPA defines LCDs as ``a determination by a fiscal intermediary 
or a carrier under part A or part B, as applicable, respecting whether 
or not a particular item or service is covered on an intermediary-or 
carrier-wide basis under such parts, in accordance with section 
1862(a)(1)(A).''

B. New Definition: Local Coverage Determination (LCD)

    Section 522 of BIPA does not use the term ``LMRP.'' Rather, it uses 
the term ``local coverage determination (LCD).'' This definition 
indicates that only those determinations made by FIs and carriers under 
the ``reasonable and necessary'' provision are to be considered LCDs.

C. Differences Between an LMRP and an LCD

    As described in section I.D of this preamble, an LMRP may contain 
four different types of provisions (benefit category, statutory 
exclusion, medical necessity, and coding). An LCD, on the other hand, 
has been specifically defined in statute as a determination only under 
section 1862(a)(1)(A) of the Act's ``reasonable and necessary'' 
provision. For the purposes of this regulation, we will use the term 
``medical necessity provision'' to describe section 1862(a)(1)(A) of 
the Act. We intend to work with contractors to divide LMRPs into 
separate LCD and non-LCD documents; it is likely that LMRPs will 
continue to exist for the next several years. During this time, the 
term LCD will refer to both of the following:
     Separate, stand-alone documents entitled ``LCDs'' that 
contain only medical necessity language; and
     The medical necessity provisions of an LMRP.

D. Impact of Section 522 of BIPA on the Definition of NCD

    Section 522 of BIPA defines an NCD as ``a determination by the 
Secretary with respect to whether or not a particular item or service 
is covered nationally under this title [title XVIII], but does not 
include a determination of what code, if any, is assigned to a 
particular item or service covered under this title or a determination 
with respect to the amount of payment made for a particular item or 
service so covered.'' This new statutory definition is not limited to 
only those determinations made under section 1862(a)(1) of the Act, but 
extends to benefit category and statutory exclusion determinations made 
by the Secretary as well. Typically, scope of benefits NCDs would 
further specify whether services would be covered under specific 
statutory categories that exist under Part A and Part B of the Medicare 
Act. (Section 1812, 1832, and 1861(s)). Thus, a scope of benefits NCD 
could be used to establish a policy on whether a particular device is 
considered durable medical equipment. Similarly, the Medicare Act 
prohibits payment for certain specific services. We may choose to 
establish an NCD describing those types of procedures (for example, 
whether care constitutes a routine physical examination, or cosmetic 
surgery). Therefore, as we discuss later in section III.A of this 
preamble, we are proposing to revise the definition of an NCD in 
Sec. 400.202 to include those determinations made by the Secretary on 
grounds other than section 1862(a)(1) of the Act with respect to 
whether or not a particular service is covered and to reflect the 
statutory definition. We are proposing conforming changes to 
Secs. 405.732 and 405.860 to reflect that any type of NCD may not be 
reviewed by an ALJ.
    Section 522 of BIPA enables certain individuals who are in need of 
an item or service to challenge an NCD that would deny coverage of that 
item or service in an administrative proceeding before the Board.
    Under section 1869(f)(4)(C) of the Act, for the purpose of reviews 
of NCDs, certain determinations that no national coverage or 
noncoverage determination is appropriate, are also subject to 
administrative review. Specifically, this right to review occurs only 
in cases in which there was no NCD, and a person with standing 
requested an NCD under section 1869(f)(4)(A) of the Act, and the 
Secretary determined that no national coverage determination would be 
made. We will identify this limited situation as a ``deemed NCD.'' In 
addition, if we have failed to meet a deadline we set under section 
1869(f)(4)(A)(iv) of the Act, we are deemed to have made a 
determination that no coverage or noncoverage determination is 
appropriate.

E. Differences Between the Claims Appeal Process and the NCD/LCD Review 
Processes

    As explained earlier in this preamble, the existing claims appeal 
rights are not significantly changed by section 522 of BIPA. Our claims 
appeal regulations will continue to provide detailed administrative 
appeal rights for beneficiaries whose claims are denied. These claims 
appeal procedures permit beneficiaries to challenge the initial claims 
denial and include de novo review by an independent ALJ. If still 
dissatisfied after exhausting all administrative remedies, a 
beneficiary has a right to seek judicial review in a Federal district 
court. This administrative system enables beneficiaries to submit any 
relevant information pertaining to this individual claim. Moreover, 
because LCDs are not controlling authorities for ALJs, an individual 
claim appeal could result in the claim being paid without the need to 
challenge the underlying LCD. Another section of BIPA, section 521, 
makes changes to those procedures with a different effective date. We 
would address any necessary revisions to our claims appeals regulations 
in future Federal Register documents.
    We view section 522 of BIPA as creating an administrative review 
process that is separate and independent from the claims appeals 
process. The procedures used in section 522 for the BIPA administrative 
challenges process will be different, because the nature of the 
challenge and the relevant evidence is different. A challenge under 
section 522 of BIPA is a challenge to an entire policy, or specific 
provisions contained therein, and not just one claim denial. Therefore, 
section 522 of BIPA challenges may lead to changes that impact other 
beneficiaries if the policies are found to be unreasonable under the 
applicable standard for review.
    Complaints under section 522 of BIPA also are subject to specific 
standing rules. Namely, under section 1869(f)(5) of the Act ``[a]n 
action under this subsection seeking review of a[n NCD]

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or [LCD] may be initiated only by individuals entitled to benefits 
under part A, or enrolled under part B, or both, who are in need of the 
items or services that are the subject of the coverage determination.'' 
Only a beneficiary who has standing may bring an administrative 
challenge under section 522 of BIPA. Those rights cannot be assigned to 
anyone else. We are proposing to define ``in need'' as an aggrieved 
party who needs an item or service but has not yet received the item or 
service. At the time the complaint is filed, an aggrieved party may not 
have received the service that is the subject of the challenge, unless 
it is an item that is needed on an ongoing basis such as diabetic test 
strips. In general, the standing provision will require people seeking 
review of an NCD or LCD to receive the item or service after filing a 
challenge under section 522 of BIPA.
    Although section 522 of BIPA does not enable a Medicare beneficiary 
to seek an advance determination on a particular claim or in advance of 
obtaining an item or service, an individual can challenge in advance of 
receiving an item or service the policy (LCD or NCD) that would cause 
the claim to be denied. As we discuss in greater detail in section 
III.E of this preamble, a successful challenge would result in the 
individual having his or her specific claim adjudicated without 
reference to the challenged policy. Claims that are otherwise payable, 
may be paid. In addition, a successful challenge to an LCD or NCD may 
result in the following:
     The policy being retired.
     Further agency action to modify the policy by clarifying 
the rationale or supplementing the record supporting the policy.

F. The Reconsideration Process

1. NCDs
    We previously established a procedure by which individuals could 
seek reconsideration of policies established in an NCD. These 
procedures were set forth in the April 27, 1999 notice (64 FR 22619, 
22625). In general, the reconsideration process permits any individual 
(not just aggrieved parties) to submit new evidence to us for review, 
or to suggest that we had misinterpreted existing evidence. We then 
review this evidence and do one of two things. First, if we believe 
that the evidence has merit and warrants a change to the NCD, we would 
revise the NCD and issue a new NCD in its place. If we do not believe 
the evidence warrants a change to the NCD, we would supplement the NCD 
record with this new evidence and reissue the NCD with no changes. A 
revised or reissued NCD becomes the policy subject to review under 
section 522 of BIPA.
    We believe that CMS or contractor personnel with medical and 
scientific experience should first consider new clinical and scientific 
evidence to determine whether any changes to our coverage policies are 
necessary. The reconsideration process that we previously created was 
consistent with this approach. An aggrieved party may also submit new 
evidence in the coverage review processes. If new evidence is submitted 
during the coverage appeals process, those proceedings will be stayed 
in order for our policy makers or contractor clinical and scientific 
experts to consider the new clinical and scientific evidence. Once that 
reconsideration process is completed, the coverage review process will 
resume.
    New evidence is any clinical or scientific evidence that was not 
previously considered by the agency or contractor when the NCD was 
issued.
2. Local Policy
    The local policy reconsideration process is set forth in the 
Program Integrity Manual, Chapter 13, Section 11 (see http//
www.cms.hhs.gov/manual/108_pim/pim83c13.asp#sect11). The local policy 
reconsideration process parallels the NCD reconsideration process.
    New evidence is any clinical or scientific evidence that was not 
previously considered by the agency or contractor when the local policy 
was issued.

G. Difference Between an LCD/NCD Review and an LCD/NCD Reconsideration

    The main difference between an LCD/NCD review under section 522 of 
BIPA and an LCD/NCD reconsideration is the avenue an individual chooses 
to take to initiate a change to a coverage policy. All interested 
parties, including an aggrieved party, could request a reconsideration 
of an LCD or NCD, rather than filing a complaint to initiate the review 
of an LCD or NCD. Conversely, only an aggrieved party could file a 
complaint to initiate the review of an LCD or NCD. If the aggrieved 
party believes that we, or the contractor, misinterpreted evidence or 
excluded available evidence in making the coverage determination or has 
new evidence to submit, then the aggrieved party has the option to file 
a request for a reconsideration by us or our contractor or file a 
complaint to seek review by an adjudicator.
    In the reconsideration process, all interested parties, not just 
aggrieved parties, would have the opportunity to submit new scientific 
and medical evidence for review by individuals with medical and 
scientific expertise. The reconsideration process would permit experts 
to make judgments about those policies, rather than using an 
adjudicatory proceeding. Regardless of whether the reconsideration 
leads to a change in policy, we would update the LCD or NCD record to 
include the new evidence and, because of the new date of issuance, 
would establish a new NCD or LCD. The NCD or LCD updated by a 
reconsideration will lead to a new coverage determination that an 
aggrieved party may subsequently challenge by filing a complaint with 
the appropriate adjudicator. This is discussed in greater detail in 
section III.E of this preamble.

III. Provisions of the Proposed Rule

A. Overview

    We are proposing that a Medicare beneficiary who qualifies as an 
aggrieved party may challenge an LCD or an NCD (or specific provisions 
therein) by filing an acceptable complaint with the Social Security 
Administration's Office of Hearings and Appeals (OHA) or the Board of 
HHS, respectively. The LCD or NCD review process is initiated if the 
applicable adjudicator determines the complaint to be acceptable.
    In this proposed rule, we are proposing in Sec. 400.202 to add a 
definition of the ``Board'' to mean the Departmental Appeals Board. We 
are also proposing to add a definition of ``Local coverage 
determination (LCD)'' and to revise the definition of ``National 
coverage determination (NCD).'' These definitions are specific to 
Medicare and would be revised to reflect the definitions for these 
terms found in section 522 of BIPA. The proposed rule would make clear 
that a determination of what code, if any, that is assigned to a 
service or a determination with respect to the amount of payment to be 
made for the service is not included in the definition of an LCD or an 
NCD. We use the term ``Services'' as defined in Sec. 400.202 to include 
both ``items and services.''
    We are proposing to revise paragraph (a) of Sec. 405.732, ``Review 
of a national coverage decision (NCD),'' to state that an NCD is a 
determination by the Secretary with respect to whether or not a 
particular item or service is covered nationally under title XVIII. An 
NCD

[[Page 54538]]

does not include a determination of what code, if any, is assigned to a 
particular item or service covered under title XVIII or a determination 
with respect to the amount of payment made for a particular item or 
service. NCDs are made under section 1862(a)(1) of the Act or other 
applicable provisions of the Act. An NCD is binding on all Medicare 
carriers, fiscal intermediaries, QIOs, HMOs, CMPs, HCPPs, and ALJs.
    We are proposing to revise paragraph (b) of Sec. 405.732 to state 
that an ALJ may not disregard, set aside, or otherwise review an NCD. 
An ALJ may review the facts of a particular case to determine whether 
an NCD applies to a specific claim for benefits and, if so, whether the 
NCD has been applied correctly to the claim.
    We are proposing to revise paragraph (c) of Sec. 405.732 to state 
for initial determinations made before October 1, 2002, and for 
challenges to an NCD made under section 1862(a)(1) of the Act, a 
court's review of an NCD is limited to whether the record is incomplete 
or otherwise lacks adequate information to support the validity of the 
decision, unless the case has been remanded to the Secretary to 
supplement the record regarding the NCD. The court may not invalidate 
an NCD except upon review of the supplemental record.
    We are proposing to revise paragraph (a) of Sec. 405.860, ``Review 
of a national coverage determination (NCD),'' to state that an NCD is a 
determination by the Secretary with respect to whether or not a 
particular item or service is covered nationally under title XVIII. An 
NCD does not include a determination of what code, if any, is assigned 
to a particular item or service covered under title XVIII or a 
determination with respect to the amount of payment made for a 
particular item or service. NCDs are made under section 1862(a)(1) of 
the Act or other applicable provisions of the Act. An NCD is binding on 
all Medicare carriers, fiscal intermediaries, QIOs, HMOs, CMPs, HCPPs, 
and ALJs.
    We are proposing to revise paragraph (b) of Sec. 405.860 to state 
that an ALJ may not disregard, set aside, or otherwise review an NCD. 
An ALJ may review the facts of a particular case to determine whether 
an NCD applies to a specific claim for benefits and, if so, whether the 
NCD has been applied correctly to the claim.
    We are proposing to revise paragraph (c) of Sec. 405.860 to state 
for initial determinations made before October 1, 2002, and for 
challenges to an NCD made under section 1862(a)(1) of the Act, a 
court's review of an NCD is limited to whether the record is incomplete 
or otherwise lacks adequate information to support the validity of the 
decision, unless the case has been remanded to the Secretary to 
supplement the record regarding the NCD. The court may not invalidate 
an NCD except upon review of the supplemental record.
    We are also proposing to add a new part 426, titled ``Reviews of 
Local and National Coverage Determinations,'' to title 42 of the CFR. 
In addition, we are proposing the following in part 426:
     Subpart A would contain general provisions applicable to 
the entire part.
     Subpart B would be reserved.
     Subpart C would contain the general provisions applicable 
to the review of LCDs and NCDs.
     Subpart D would contain the provisions specific to the 
review of LCDs
     Subpart E would contain the provisions specific to the 
review of NCDs.

B. Subpart A (General Provisions)

    Subpart A of part 426 would specify the general provisions 
applicable to the entire part. Section 426.100, ``Basis and scope,'' 
would set forth the basis (under sections 1869(f)(1) and (f)(2) of the 
Act), and the scope would specify the requirements and procedures for 
the review of LCDs and NCDs. In Sec. 426.110, we would define the terms 
used in part 426 whose definitions may not otherwise be implicit.
    Under section 522 of BIPA, only an ``Aggrieved party'' may file a 
complaint to initiate the review of an NCD or an LCD. We would define 
``Aggrieved party'' as a Medicare beneficiary who is entitled to 
benefits under Part A, enrolled under Part B, or both (including an 
individual enrolled in fee-for-service Medicare, in a Medicare+Choice 
plan, or in another Medicare managed care plan), and is in need of a 
service that is the subject of an applicable LCD (in the relevant 
jurisdiction) or an NCD, as documented by the beneficiary's treating 
physician.
    To properly demonstrate that a beneficiary is ``in need,'' we are 
proposing that the beneficiary's treating physician document the need 
for the service. We believe this definition is consistent with the 
plain language of the statute and ensures that only beneficiaries who 
are aggrieved have standing to use this review process. Furthermore, we 
believe the statutory language allowing reviews of coverage 
determinations to be ``* * * initiated only by individuals * * * who 
are in need'' means individuals have not yet received the service that 
is the subject of the coverage determination. Therefore, an individual 
who has already received a service would not ordinarily qualify as an 
aggrieved party under our definition, and would not be eligible to 
initiate a review of a coverage determination regarding that service 
because he or she would no longer be in need of that service. However, 
there would be an exception for individuals who have a continuing need 
for a particular item or service that is subject to an NCD or LCD. We 
would require that an individual must be an aggrieved party at the time 
a complaint is filed, but we would not preclude an individual from 
receiving the service that is named in the complaint after the 
complaint is filed.
    An individual who has an ongoing need for a service, or an 
individual who has received a service in the past but has a need to 
receive the service again (and has not received the service at the time 
a complaint has been filed) would meet our definition of aggrieved 
party because an unfulfilled need for the service exists.
    We would define ``Contractor'' as a carrier (including a DMERC) or 
an FI (including an RHHI) that has jurisdiction for the LCD at issue. 
Specifically, a carrier or FI with LCD jurisdiction for a particular 
geographical area would be the contractor responsible for, among other 
things, providing the record of its LCDs.
    We would define ``Deemed NCD'' as a determination that the 
Secretary makes in response to a request for an NCD by an aggrieved 
party under section 1869(f)(4)(B) and (C) of the Act, that no national 
coverage or noncoverage determination is appropriate, or the Secretary 
failed to meet the deadline under section 1869(f)(4)(iv) of the Act. 
Section 1869(f)(4)(C) of the Act deems certain decisions of the 
Secretary to be NCDs for purposes of administrative review. These 
circumstances would be as follows:
     When there was no NCD for a particular service.
     When an aggrieved party submits a request to the Secretary 
to make a determination about that service.
     When the Secretary determines that no national coverage or 
noncoverage determination is appropriate.
    The statute directs that only these determinations are deemed to be 
NCDs that may be reviewed by the Board. The Supreme Court has 
recognized, however, that the Secretary's decision of whether to issue 
a generally applicable rule or to allow individual adjudication ``are 
clearly discretionary decisions.'' Heckler v. Ringer, 466 U.S. 602, 617 
(1984).

[[Page 54539]]

    We would define ``New evidence'' as clinical or scientific evidence 
that was not previously considered by us or the contractor before the 
NCD or LCD was issued.
    We would define ``Party'' as an individual who has the right to 
participate in the LCD or NCD review process. A party includes an 
aggrieved party, a contractor, and, as appropriate, CMS. In the case of 
an LCD review, we may choose whether to be a party in the review along 
with the contractor. We believe that we, or our contractors, should be 
afforded an opportunity to participate in these reviews. These reviews 
involve challenges to important agency policies that may impact 
millions of beneficiaries. We believe either we or the contractors who 
issued the LCDs or NCDs should be given the opportunity to present 
evidence and make arguments supporting the rationale behind their 
coverage policies before an adjudicator issues a decision on whether 
the policies are reasonable. We note that we are always a party to an 
NCD review and contractors would not participate in an NCD review.
    We would also define ``Reasonableness standard'' as the standard 
that an ALJ or the Board must apply when conducting an LCD or an NCD 
review. In determining whether NCDs or LCDs are valid, the adjudicator 
must uphold a challenged policy (or a provision or provisions of a 
challenged policy) if the findings of fact, interpretations of law, and 
applications of fact to law by CMS or the contractor are reasonable 
based on the NCD or LCD record. We are proposing to use the statutory 
language from sections 1869(f)(1)(A)(iii) and (f)(2)(A)(i) of the Act, 
which instructs adjudicators to defer only to the reasonable findings 
of fact, reasonable interpretations of law, and reasonable applications 
of fact to law by the Secretary.
    We are requesting public comments on the feasibility of using an 
alternative dispute resolution (ADR) process and suggestions regarding 
how an ADR process could be used in an evidence-based review process.

C. Subpart B (Reserved)

    We are proposing to reserve subpart B.

D. Subpart C (General Provisions for the Review of LCDs and NCDs)

    We are proposing that the general provisions common to both the 
review of LCDs and NCDs would be established in subpart C. In 
Sec. 426.300(a), we are proposing that the review of a challenged 
provision (or provisions) of an LCD is conducted by an ALJ only upon 
the receipt of an acceptable complaint as described in Sec. 426.400. We 
are also proposing in Sec. 426.300(b) that the review of a challenged 
provision (or provisions) of an NCD is conducted by the Board only upon 
the receipt of an acceptable complaint as described in Sec. 426.500. An 
acceptable complaint can only be submitted to the applicable 
adjudicator by an aggrieved party. Additionally, Sec. 426.300(c) would 
allow for the review of deemed NCDs, a process that would parallel the 
review of NCDs.
    For the reasons described in section II.E of this preamble, we are 
proposing in Sec. 426.310(a) to keep LCD and NCD reviews independent of 
the claims appeal processes set forth in part 405, subparts F and G; 
part 417, subpart Q; and part 422, subpart M. In Sec. 426.310(b), we 
would also require an aggrieved party to notify the OHA or the Board of 
the disposition of any pending claim or appeal relating to the 
aggrieved party's LCD or NCD complaint. The aggrieved party would have 
to make this notification as soon as possible, regardless of the time 
during the coverage determination review that the aggrieved party filed 
a claim. As discussed earlier in this section of the preamble, we would 
allow the aggrieved party to receive a service after filing a 
complaint, without affecting the coverage determination review. 
However, in most circumstances, an individual could not obtain a 
service, submit a claim under the claims appeal process, and then seek 
to file a complaint because the individual would not satisfy the ``in 
need'' requirement.
    In Sec. 426.320(a), we are proposing that only an aggrieved party 
may initiate a review to challenge an LCD or NCD (or an existing 
specific provision or provisions of an LCD or an NCD) by filing an 
acceptable complaint. Sections 1869(f)(1)(A)(iii) and (f)(2)(A)(i) of 
the Act are very specific in allowing these reviews only to be 
initiated by an aggrieved party. Under this requirement, an aggrieved 
party would be allowed only to challenge language that exists within an 
LCD or NCD. Similarly, the statute does not allow for an aggrieved 
party to use this process to challenge anything that does not meet the 
definition of an LCD or an NCD (see Sec. 426.320(b)). For example, 
draft LCDs and NCDs would be excluded from review as they are 
predecisional. LCDs and NCDs that are no longer in effect would also be 
excluded as they are no longer in effect. Other interpretive policies 
that are not LCDs or NCDs would also not be subject to review under 
this process.
    Contractor policies that are not based on section 1862(a)(1)(A) of 
the Act, the ``medical necessity'' provision, would not be subject to 
review. The statutory language in section 522 of BIPA specifically 
limits the definition of LCDs to those documents or parts of documents 
that are based on section 1862(a)(1)(A) of the Act. Provisions of 
contractor policies, that are based on things other than the medical 
necessity statute, such as benefit category determinations, statutory 
exclusion determinations, and coding determinations, would not be 
subject to review under this part.
    In addition, any M+C or other managed care plan policy, rule, or 
procedure would not be subject to review under this process. Further, 
the 522 complaint process is distinct from the pre-service appeal 
rights established for M+C plan and other Medicare managed care 
enrollees.
    Individual claim determinations by adjudicators would also not be 
subject to review under this process. Beneficiaries who wish to appeal 
an individual claim determination must do so through the claims appeal 
process.
    Although NCDs and deemed NCDs would be subject to review under this 
process, determinations not meeting those definitions would not be 
subject to review under this process. For example, a determination made 
by us at the request of a provider that no national coverage or 
noncoverage determination is appropriate would not be considered a 
deemed NCD because a deemed NCD would only be the result of an 
aggrieved party requesting an NCD under section 1869(f)(4) of the Act. 
These determinations, therefore, would not be subject to review under 
this process.
    In Sec. 426.330, we are proposing not to allow an aggrieved party 
to assign his or her rights to file a complaint against an LCD or NCD 
to any other individual or entity. Neither an ALJ nor the Board will 
recognize as valid any attempt to assign rights under section 1869(f) 
of the Act. In Sec. 426.330(b), we are proposing that the aggrieved 
party filing the complaint bears the burden of proof and the burden of 
persuasion for the issue or issues raised in the complaint. The burden 
of persuasion will be judged by a preponderance of the evidence. While 
it is by no means required, we realize that some aggrieved parties may 
wish to retain representation.
    In Sec. 426.340, we are proposing that if an aggrieved party 
submits new evidence pertaining to an NCD or LCD, the administrative 
proceedings under part 426 will be stayed upon request from us or the 
contractor to consider the

[[Page 54540]]

additional clinical or scientific evidence. Following the review of 
this evidence, we or the contractor will file a supplemental record. 
Because the aggrieved party could submit new information that was not 
previously considered at several steps of the section 522 of BIPA 
review process, we are proposing that whenever an aggrieved party 
introduces new evidence, the section 522 of BIPA proceedings will be 
stayed upon request from us or the contractor in order to permit 
clinical and scientific experts to evaluate the evidence using the 
reconsideration process discussed earlier in this preamble. Thus, in 
the case in which an aggrieved party seeks to rely on new clinical or 
scientific evidence, the aggrieved party has a choice to file a review 
of the coverage policy with an appropriate external review entity under 
section 522 of BIPA or file a reconsideration review request, as 
discussed earlier in this preamble. In either case, our policy makers 
or the appropriate contractor clinical or scientific experts would be 
given the opportunity to formally consider the evidence submitted by 
the aggrieved party and revise our policy if the clinical and 
scientific evidence supports a change. Following the reconsideration, 
if necessary, a supplemental record would be prepared and section 522 
of BIPA proceedings could continue. An aggrieved party is not 
prohibited from filing a simultaneous appeal with an adjudicator and a 
reconsideration review request with us or our contractor.

E. Subpart D (The Review of an LCD) and Subpart E (The Review of an 
NCD)

    In subparts D and E, we are proposing to set forth the procedures 
for the review of LCDs and NCDs, respectively. The process for NCD 
reviews is largely the same as the process for LCD reviews. The major 
exceptions are as follows:
     NCDs may be based on other statutory provisions, not just 
section 1862(a)(1)(A) of the Act.
     NCD reviews are conducted by the Board.
     There is no role for ALJs or contractors in an NCD review.
     We are always a party to an NCD review.
     The process for taking an NCD out of effect is different 
than an LCD being ``retired.''
     Board administrative decisions regarding NCDs would be 
made available in a searchable format on the Medicare Internet site, 
with identifying information removed.
    For the purpose of this preamble, we will consolidate the 
discussion of the requirements and policy decisions when possible. 
Sections 426.400 and 426.500 would contain the requirements for filing 
an acceptable complaint regarding a provision or provisions of an LCD 
and an NCD, respectively. In both cases, a complaint must be in writing 
and must be from an aggrieved party. In Sec. 426.400(a), we would 
require that complaints regarding LCDs would have to be submitted to 
the OHA of the Social Security Administration, and complaints regarding 
NCDs would have to be submitted to the Board of HHS (see 
Sec. 426.500(a)). We would also require, in both cases, a valid 
complaint to contain the beneficiary-identifying information listed in 
Sec. 426.400(c)(1) and Sec. 426.500(c)(1) including the treating 
physician's certification that the beneficiary needs the service that 
is the subject of the coverage determination, and a statement from the 
treating physician that payment for the service is likely to be denied 
under that coverage determination.
    We believe that the physician's certification is necessary to 
ensure that the individual is an aggrieved party (see our discussion of 
the definition of aggrieved party in section III.A of this preamble.) 
In Sec. 426.400(b), we would further require that the complaint be 
received by the OHA or the Board (whichever is applicable) within 6 
months of this certification so that reviews of coverage determinations 
will remain reasonably current. We are proposing that a complaint 
contain the physician's statement that payment for the service is 
likely to be denied under the coverage determination because we believe 
that this step will help to ensure an actual controversy exists.
    We would also require the information in Secs. 426.400(c)(2) and 
(c)(3) and 426.500(c)(2) and (c)(3), which is necessary to identify the 
LCD or NCD (or the specific provision or provisions of the LCD or NCD) 
that is (are) adversely affecting the aggrieved party. We also would 
require a statement from the aggrieved party that explains the 
rationale for the complaint and states whether the service has been 
received (which in some cases would indicate that the individual is not 
an aggrieved party) (see Secs. 426.400(c)(3) and 426.500(c)(3).
    We are also proposing, in Secs. 426.400(c)(4) and 426.500(c)(4), to 
allow the aggrieved party to submit copies of clinical or scientific 
evidence that supports the complaint. In Sec. 426.400(d), we are 
proposing that two or more aggrieved parties may initiate the review of 
an LCD by filing a single written complaint with the OHA if the 
conditions in Sec. 426.400(d)(1)(i) and (d)(ii) are met. Similarly, in 
Sec. 426.500(d), we are proposing that two or more aggrieved parties 
may initiate the review of an NCD by filing a single complaint with the 
Board if the conditions in Sec. 426.500(d)(1)(i) and (ii) are met.
    Section 426.405 would specify the authority of the ALJ during an 
LCD review, including authority during a hearing, if applicable, as 
well as the authority that an ALJ would not have during an LCD review 
(see Sec. 426.405(d)). We believe that the authority that would be 
granted to, and the authority that would not be granted to, an ALJ 
during an LCD review by this section is consistent with the statute and 
with common practice in other administrative proceedings. Similarly, in 
Sec. 426.505, we would set forth the specific authority of the Board 
during an NCD review, if applicable, as well as the authority that the 
Board would not have during an NCD review (see Sec. 426.505(d)).
    Sections 426.406 and 426.506 would prohibit ex parte contacts so 
that no party or person (except employees of the ALJ's office) would 
communicate in any way with the ALJ on any substantive matter at issue 
in a case, unless on notice and opportunity for all parties to 
participate. This provision does not prohibit a person or party from 
inquiring about the status of a case or asking routine questions 
concerning administrative functions or procedures.
    In Sec. 426.410, we would establish the ALJ's role in docketing and 
evaluating the acceptability of LCD complaints. These procedures would 
be very similar to the Board's role in docketing and evaluating the 
acceptability of NCD complaints proposed in Sec. 426.510. Under the 
procedures, the adjudicatory body would receive and docket the 
complaint (which, at the discretion of the adjudicators, could include 
the name of the coverage determination rather than the individual 
bringing the challenge), evaluate the acceptability of the complaint, 
and take similar actions thereafter.
    We are proposing in Secs. 426.410 and 426.510 the criteria that a 
complaint would have to meet to be considered as an acceptable 
complaint by an ALJ or the Board. An aggrieved party must file the 
complaint; the complaint must meet all of the requirements of a valid 
complaint regarding an LCD in Sec. 426.400, or regarding an NCD in 
Sec. 426.500, and could only be challenging a policy that meets the 
definition of an LCD or an NCD.
    If a complaint is deemed to be unacceptable after having been 
evaluated under Secs. 426.410(b) and

[[Page 54541]]

426.510(b), the applicable adjudicator would provide the aggrieved 
party (or parties) one opportunity to amend the unacceptable complaint 
within a timeframe set forth by the adjudicator (see Secs. 426.410(c) 
and 426.510(c)). If the aggrieved party (or parties) does not submit an 
acceptable amended complaint within this time frame, the adjudicator 
would issue an administrative decision dismissing the unacceptable 
complaint. We are seeking public comment on whether an aggrieved party 
should also be precluded from filing another complaint on the same 
issue for some period of time.
    If after having been evaluated under Secs. 426.410(b) and 
426.510(b), a complaint is accepted, the adjudicator would send a 
letter to the aggrieved party (or parties) acknowledging the complaint 
and informing them of the docket number (see Sec. 426.410(d)). The 
adjudicator would also forward a copy of the complaint and the 
acknowledgement letter to the applicable contractor and us, and request 
that we or the contractor send a copy of the LCD record to the ALJ and 
all parties to the LCD review. We believe that these steps will provide 
all parties involved in the LCD review with the information to proceed 
with the review. The corresponding section in Sec. 426.510(d) would 
require the adjudicator to follow the same process for NCDs.
    In Secs. 426.410(e) and 426.510(e), we would allow for adjudicators 
to consolidate complaints regarding LCDs and NCDs, respectively. Under 
this provision, several complaints could be consolidated into one 
review if the complaints were appropriately similar. The review 
processes would not be affected by a decision to consolidate complaints 
into one review. Rather, consolidation would only be a tool to reduce 
the burden of multiple or duplicative challenges to the same policy.
    In Sec. 426.415, we would provide information identifying the 
person who would represent the contractor in the LCD review process to 
the ALJ, and all parties to the LCD review. We would make a decision 
whether the agency or the contractor would participate in the LCD 
review. Under the corresponding section in Sec. 426.515, we would 
provide a copy of the NCD record (as described in Sec. 426.518) to the 
Board and all parties to the NCD review.
    Sections 426.418 and 426.518 would describe the elements of a 
contractor's LCD and NCD record, respectively. We are proposing that an 
LCD or NCD record would be composed of documents and materials that we, 
or the contractor, considered during the development of the LCD and 
NCD. In Secs. 426.418(b) and 426.518(b), we would not include 
privileged material, proprietary data or any new evidence as part of 
the record under Secs. 426.415 and 426.515 or otherwise prohibited from 
release by Federal law. Official records presented to the Board may 
contain proprietary data or information, if the information was used in 
reaching the NCD under appeal. In these instances, we would propose 
that proprietary information be protected from inappropriate disclosure 
according to all applicable statutes, regulations, or other formal, 
binding agreements governing use and release of the information. We are 
inviting public comments on the scope of proprietary data and the 
extent to which this material should be disclosed.
    In Sec. 426.420, we would allow a contractor to retire the LCD 
under review before the date the ALJ issues an administrative decision 
regarding the LCD. Retiring an LCD would mean that the contractor could 
no longer use that LCD in the adjudication of claims; thus, there would 
no longer be a need for an LCD review. In Sec. 426.520, we would be 
allowed to repeal an NCD under review before the date the Board issues 
an administrative decision regarding that NCD. Repealing an existing 
NCD would mean this policy would no longer be a controlling authority 
for our contractors and certain adjudicators. Thus, there no longer 
would be a need for an NCD review concerning the superceded NCD.
    Under Secs. 426.423 and 426.523, we are proposing to permit 
aggrieved parties who filed the complaint to withdraw complaints 
regarding LCDs and NCDs, respectively. We would allow an aggrieved 
party to withdraw a complaint before the applicable adjudicator issues 
an administrative decision regarding the complaint by simply sending a 
written notice to the OHA, the applicable contractor, and us (if 
applicable) for LCDs, or to the Board and us for NCDs (see 
Secs. 426.423(b) and 426.523(b)). Under this process, the adjudicator 
would issue an administrative decision (discussed later in this section 
of the preamble) dismissing the complaint, and the aggrieved party 
would not be able to file another complaint to the same coverage 
determination for 6 months. This proposal is designed to encourage 
disputes to be resolved in an efficient manner by discouraging a 
challenger from filing a complaint but voluntarily dismissing that 
challenge after significant administrative resources have been 
expended.
    In the case of a joint complaint, one or more aggrieved parties may 
withdraw from the review without affecting the status of any remaining 
aggrieved party or parties named in the complaint. The adjudicator 
would issue an administrative decision dismissing the complaint for the 
aggrieved party or parties who wish to withdraw, and the review would 
continue until the adjudicator issued an administrative decision on the 
merits, or until each aggrieved party withdrew his or her respective 
complaint. Similarly, if the adjudicator had decided to hold a 
consolidated review, an aggrieved party or parties who are part of the 
consolidated review may withdraw without affecting the status of the 
other aggrieved party or parties who are part of the consolidated 
review (See Secs. 426.423(c) and 426.523(c).
    Sections 426.425 and 426.525 would contain the processes for LCD 
and NCD reviews, respectively, that take place once the record has been 
filed. Sections 1869(f)(1)(A)(iii) and 1869(f)(2)(A)(i) of the Act, as 
added by section 522 of BIPA, state that the adjudicators of NCD and 
LCD reviews, respectively, ``* * * shall review the record and shall 
permit discovery and the taking of evidence to evaluate the 
reasonableness of the determination, if the [adjudicator] determines 
that the record is incomplete or lacks adequate information to support 
the validity of the determination.'' Therefore, we would allow the 
aggrieved party who submitted the complaint to file a motion alleging 
that the LCD record (or the NCD record in the case of an NCD review) is 
not complete, not adequate to support the validity of the coverage 
determination, or both. This motion would be filed after the aggrieved 
party has had adequate time to review the record (we are proposing 30 
days after receipt of the record, with an extension if requested). The 
motion would be submitted to the adjudicator, the contractor (if an LCD 
review), and us (if applicable) (see Secs. 426.425(a) and 426.525(a)).
    If the adjudicator determines that the record is not complete, not 
adequate to support the validity of the coverage determination, or 
both, the adjudicator would notify all parties to the review of this 
decision and allow discovery (as proposed in Secs. 426.432 and 426.532 
and discussed later in this section of the preamble). Therefore, 
discovery would be allowed only if the aggrieved party filed a motion 
that the record was not complete, not adequate to support the validity 
of the coverage determination, or both, and the adjudicator agreed with 
that motion.

[[Page 54542]]

    If the adjudicator determines that the record is complete and 
adequate to support the validity of the coverage determination, the 
adjudicator would deny the motion, would not permit discovery, but 
would review the provision or provisions named in the complaint based 
on the reasonableness standard.
    Under Secs. 426.425(a)(3) and 426.525(a)(3), if an aggrieved party 
files a motion, based on new evidence, alleging that the contractor's 
LCD or NCD record is not complete, not adequate to support the validity 
of the LCD or NCD, or both, the Board or the ALJ would stay the 
proceedings upon request from us or the contractor to permit a 
consideration of the new evidence as described in Sec. 426.340.
    Under Secs. 426.429 and 426.529, we would describe the process for 
submitting a supplemental record after new evidence has been considered 
under Sec. 426.340. An aggrieved party may request additional discovery 
or continue the process to seek a decision by the ALJ or the Board.
    Under Secs. 426.430 and 426.530, we are proposing the ALJ's or 
Board's role in determining whether the contractor's LCD or our NCD 
record would be complete and adequate to support the validity of the 
LCD or NCD. In paragraph (a), we are proposing that if the aggrieved 
party does not file a motion described in Sec. 426.425(a)(1) or 
Sec. 426.429(a)(1), the ALJ or Board will review the contractor's LCD 
or our NCD record and apply the reasonableness standard, as described 
in Sec. 426.431.
    In paragraph (b) of Secs. 426.430 and 426.530, we are proposing 
that if the aggrieved party files a motion described in Sec. 426.425(a) 
or Sec. 426.429(a), the ALJ or Board must: (1) Allow the contractor or 
us to submit a statement to the ALJ or Board and the aggrieved party 
responding to the motion described in paragraph (a) of this section; 
(2) review the contents of the LCD or NCD record, as described in 
Sec. 426.418; (3) hold conferences, if necessary, which may be 
conducted (at the ALJ's or Board's discretion) either in person, or, by 
mutual agreement of the parties, by telephone, picture-tel, or any 
other means agreed upon by all parties involved; and (4) determine 
whether the contractor's LCD or our NCD record is complete and adequate 
to support the validity of the LCD or NCD.
    In paragraph (c) of Secs. 426.430 and 426.530, we are proposing the 
ALJ's or Board's role in determining the completeness of the 
contractor's LCD or our NCD record, and in determining the adequacy of 
the contractor's LCD or our NCD record to support the validity of the 
LCD or NCD.
    We are considering requiring the petitioner in an NCD or LCD 
proceeding before the adjudicator to submit a statement about the 
factual and legal basis on which that party considers that record to be 
``incomplete'' and/or to ``lack adequate information to support the 
validity of the determination,'' and an offer of proof supporting any 
factual allegations on the ``incompleteness'' of the record. CMS or the 
contractor would respond in writing to this statement of 
``incompleteness.'' The adjudicator would review the NCD or LCD record 
and both parties' submissions. If the adjudicator concluded that the 
NCD or LCD record is complete and adequate to support the validity of 
the determination, the adjudicator could issue a written decision to 
that effect. This decision would then constitute a final agency action, 
appealable to court. If the adjudicator determined that the record was 
incomplete or lacked adequate information, the adjudicator could issue 
a written ruling explaining the reasons for this decision. The 
adjudicator would then be required to permit discovery and to hold a 
hearing for the taking of additional evidence on any material issues of 
fact. Both parties could supplement the record at this stage of the 
review process. We seek comments on whether this ``adequacy of 
information'' determination procedure by the adjudicator would lead to 
more prompt resolution of cases and better utilization of resources for 
all parties involved.
    Under Secs. 426.431 and 426.531, we would describe the process that 
adjudicators would use to review the provision(s) named in a complaint 
based on the reasonableness standard. We would require the adjudicator 
to confine the review to the provision(s) of the coverage determination 
named in the complaint and to the clinical or scientific evidence 
contained in the record (or supplemental record). The adjudicator would 
have the option to consult with impartial scientific or clinical 
experts, and consider any previous ALJ or Board administrative decision 
(made under part 426) regarding the same provision(s) named in the 
complaint. We are proposing that previous ALJ or Board administrative 
decisions made under this part may be considered, but are not a 
controlling precedent. It is possible that a later challenger may 
introduce pertinent clinical or scientific evidence that was not 
submitted in the previous proceedings. We are requesting public comment 
on this approach.
    In addition, the adjudicator would have the option, under 
Sec. 426.431(b) and 426.531(b), to conduct a hearing, and allow 
subpoenas and the taking of evidence (discussed in the section of the 
preamble on Sec. 426.440 and Sec. 426.540).
    In Secs. 426.431(c) and 426.531(c), we are proposing that ALJs and 
the Board would be bound by applicable provisions of the Act, our 
regulations, and rulings. Moreover, NCDs would be controlling 
authorities for ALJs. This policy is consistent with section 
1869(f)(1)(A)(i) of the Act.
    Under Secs. 426.432 and 426.532, we are proposing that in paragraph 
(a), if the ALJ or Board orders discovery, the ALJ or Board would 
establish a reasonable timeframe for discovery, ensure that a party to 
the LCD or NCD review who receives a discovery request has certain 
rights, and ensure that a nonparty to the LCD or NCD review who 
receives a discovery request has the same rights in responding to a 
discovery request as any party. In paragraph (b), we are proposing that 
any party or nonparty receiving a discovery request may file a motion 
for a protective order before the date of production of the discovery.
    Under Secs. 426.432 and 426.532, we would also set forth the rules 
for discovery during an LCD or NCD review, respectively. Only an ALJ 
could order discovery during an LCD review if the ALJ found the 
contractor's LCD record to be incomplete, inadequate to support the 
validity of the LCD, or both, and after a motion had been filed under 
Sec. 426.425. Likewise, only the Board could order discovery during an 
NCD review if the Board found our NCD record to be incomplete, 
inadequate to support the validity of the NCD, or both, and after a 
motion had been filed under Sec. 426.525. We would require the 
adjudicator to establish a timeframe for the discovery process.
    In Sec. 426.432(c), Sec. 426.432(d), and Sec. 426.432(e), we are 
proposing that only documents relating to a specific LCD or NCD be 
eligible for discovery. The sections relating to discovery do not 
require the creation of any document. We believe that this is 
consistent with normal practice and will avoid unnecessary delays in 
the coverage determination reviews.
    Under Sec. 426.432(f), we are proposing that an adjudicator may 
order us or our contractor to provide an index of any documents 
withheld on the basis of privilege and, if necessary, conduct an in-
camera review of any documents withheld on the basis of privilege.
    While reviewing a provision of an LCD or NCD based on the 
reasonableness standard, the adjudicator may, if necessary, issue 
subpoenas,

[[Page 54543]]

consult with appropriate clinical or scientific experts, and take 
evidence during a hearing. In Secs. 426.435 and 426.535, we are 
proposing the process for obtaining and responding to, subpoenas during 
a coverage determination review. A request for a subpoena to require 
the attendance of an individual at a hearing (or provide evidence at a 
hearing) would have to be filed with the adjudicator by a party to the 
coverage determination review at least 30 days before the hearing is 
scheduled. In addition to designating the witnesses (and their 
locations) and the evidence to be produced by those witnesses, the 
subpoena would have to state the facts that the party expects the 
witness to establish, and state whether these facts could be 
established by other evidence or without the use of a subpoena. We 
believe that this will serve the purpose of ensuring that only those 
witnesses closest to, and most familiar with, the coverage 
determinations will be subpoenaed to a hearing and will allow the 
adjudication to exclude irrelevant matters. Because an LCD or NCD 
review is limited to the scientific and clinical evidence pertaining to 
the matter at the time the LCD or NCD was issued, testimonial evidence 
must be related to the appropriate time period. We are proposing in 
Sec. 426.340 that if an expert submits new clinical and scientific 
evidence, additional action by us or the contractor may be necessary.
    The subpoena sections also detail the role of adjudicators in 
granting subpoenas, the role of a party in serving a subpoena, and the 
role and rights of the individual receiving a subpoena (including the 
right to file a motion to quash a subpoena). In addition, in 
Secs. 426.435(h) and 426.535(h), we would also set forth the remedy 
afforded under section 205(e) of the Act, if a subpoena is not obeyed.
    We are proposing the rules relating to evidence in coverage 
determination reviews in Secs. 426.440 and 426.540. Under 
Secs. 426.440(a) and 426.540(a), the ALJ or Board would determine the 
admissibility of evidence consistent with Sec. 426.340. Under 
Secs. 426.440(f) and 426.540(f), we would require experts submitting 
reports to be available for cross-examination at an evidentiary 
hearing. Under Secs. 426.440(g) and 426.540(g), we would require that, 
unless otherwise ordered by the adjudicator for good cause, all 
documents and other evidence be open to examination by all parties to 
the review.
    In Secs. 426.441 and 426.541, we are proposing that the adjudicator 
notify all parties when the discovery period is closed.
    Under Secs. 426.444 and 426.544, we would describe an adjudicator's 
dismissal for cause of a complaint regarding an LCD or an NCD, 
respectively. A dismissal would be effectuated by the issuance of an 
administrative decision dismissing a complaint. In general, an 
adjudicator may dismiss a complaint if an aggrieved party (or his or 
her representative) fails to attend or participate in a pre-hearing 
conference or hearing without good cause or fails to comply with a 
lawful order from an adjudicator (see Secs. 426.444(a) and 426.544(a)). 
Under Secs. 426.444(b) and 426.544(b), we would require that the 
adjudicator dismiss complaints that fail to meet the requirements for 
acceptable complaints, including complaints regarding inapplicable 
policies or determinations. We would also require that the adjudicator 
must also dismiss a complaint if the aggrieved party withdraws the 
complaint, or if the complaint seeks review of a matter beyond the 
adjudicator's authority.
    If an aggrieved party dies after initiating the coverage 
determination complaint process and after filing an initial claim for 
benefits, the aggrieved party's estate could pursue payment under the 
claims appeals process, but the estate may not pursue a policy 
challenge.
    Under Secs. 426.444(b)(6), we would also require an ALJ to issue an 
administrative decision dismissing a complaint if the applicable 
contractor was to notify the ALJ that the LCD is being retired. When a 
contractor decides to retire an LCD, it means that the LCD (or the 
provision(s) of the LCD removed as part of the revision) cannot be used 
in the adjudication of claims after the date of issuance of the 
retirement. We would require that the LCD would no longer be effective 
within 30 days of the date of notifying the ALJ. We are proposing this 
rule because retiring an LCD ensures that the LCD will no longer be 
used in that particular jurisdiction and renders a challenge to the 
policy moot. Similarly, in Sec. 426.544(b)(6), we would notify the 
Board that the NCD is no longer in effect.
    Under Secs. 426.444(c) and 426.544(c), we would require that an 
adjudicator may, at the request of any party, or on his or her own 
motion, dismiss a complaint if the adjudicator has already issued an 
administrative decision on the LCD or the NCD or provisions of an LCD 
or an NCD and the aggrieved party has not presented any new clinical or 
scientific evidence that supports the complaint.
    In Secs. 426.445 and 426.545, we would require that witness fees, 
for appearances during a hearing, be paid by the party seeking to 
present the witness.
    Under Secs. 426.446 and 426.546, we would require that an ALJ and 
the Board, respectively, ensure that any hearing conducted regarding a 
coverage determination review is open to the public and mechanically or 
stenographically recorded. While these proceedings are open to the 
public, adjudicators are under no obligation to announce or publicize 
these proceedings. Further, the public has no right to participate in 
these proceedings. These sections would also require that all evidence 
upon which the adjudicator relies for a decision be contained in the 
record, and that any pertinent document or record be incorporated into 
the record of the coverage determination hearing.
    Under Secs. 426.447 and 426.547, we would set forth the procedures 
for the issuance and notification of ALJ and Board administrative 
decisions, respectively. The applicable adjudicator, within 90 days 
from closing the review record to the taking of evidence, would be 
required either to issue an administrative decision, or provide notice 
that the administrative decision is pending, and an approximate date a 
decision will be issued. In Sec. 426.547(b), we would explain that 
Board administrative decisions regarding NCDs would be available on the 
Medicare Internet site of the Department of Health and Human Services. 
Steps would also have to be taken to ensure the privacy of the parties 
to the review, in conjunction with applicable statutes and regulations.
    Under Sec. 426.450, we would describe the required elements of an 
ALJ's administrative decision regarding an LCD. In Sec. 426.550, we 
would similarly describe the required elements of the Board's 
administrative decision regarding an NCD. As discussed earlier in this 
section of the preamble, an administrative decision may include the 
dismissal of a complaint. If the complaint is not dismissed, the 
administrative decision would have to contain a statement pertaining to 
each provision listed in the complaint and stating whether the 
provision is valid or invalid under the reasonableness standard. We 
would also require that the administrative decision include the 
information in Secs. 426.450(b) and 426.550(b), which include LCD 
review or NCD review identifying information, claim information (if 
known), a rationale for the basis of the administrative decision, a 
summary of

[[Page 54544]]

the evidence reviewed during the review, and the respective ALJ's or 
Board member's signature and date.
    In Secs. 426.455 and 426.555, we are proposing that an 
administrative decision be prohibited from doing any of the following:
     Ordering us or our contractors to take specific actions in 
modifying (including adding to, or deleting language from) a 
provision(s) of an LCD or NCD.
     Ordering us or our contractors to pay a specific claim.
     Establishing a time limit for the establishment of a new 
or revised LCD or NCD.
     Reviewing or evaluating an LCD or NCD other than the LCD 
or NCD under review.
     Including a requirement for us or our contractors that 
specifies payment, coding, or systems changes for an LCD or NCD, or 
deadlines for implementing these changes.
    In Secs. 426.460 and 426.560, we would describe the effect of 
administrative decisions issued under Secs. 426.447 and 426.547. We are 
proposing these provisions because we believe that the exact wording of 
a new coverage determination should be made by the contractor or us. 
These policies affect other beneficiaries and, thus, these 
determinations should be made by clinicians and scientific experts who 
have the necessary specialized training. Thus, we and the contractor 
would remain the entities responsible for ensuring that the clinical 
and scientific policies are sound, resulting in the best quality of 
care for beneficiaries.
    The effect of an administrative decision would depend on the 
outcome of the coverage determination review. If the adjudicator found 
that the provision(s) named in the complaint was (were) valid under the 
reasonableness standard, the aggrieved party or parties (in the case of 
an LCD review) could appeal that decision to the Board or (in the case 
of NCD review) may challenge the final agency action in Federal court.
    If the adjudicator found that the provision(s) listed in the 
complaint was (were) invalid under the reasonableness standard and the 
contractor or we do not appeal this decision to the Board in a timely 
manner, the contractor must or we will do several things. First, there 
would be individual claim relief for the aggrieved party or parties 
named in the complaint(s).
     If the aggrieved party received (fee-for-service or 
managed care) service that was the subject of the challenged coverage 
determination after the date the complaint was filed, and a claim has 
been filed, then we would instruct the contractor (if applicable) or 
Medicare managed care organization not to use the provision(s) of the 
coverage determination that was (were) found invalid in the 
adjudication of that claim.
     If the aggrieved party has not received the service, the 
individual may obtain the service and file a claim, which could be 
reviewed by the contractor, without using the provision that has been 
found invalid.
    Neither the first level appeal reviewer nor the hearing officer 
would be bound by the invalidated provision, as they were bound at the 
initial claim determination. Specifically, we would instruct the 
contractor to make a claim determination without using the LCD or NCD 
provision(s) that has been found invalid in each of the following 
situations: (1) The claim has not been adjudicated; (2) the claim was 
denied but not appealed, in which case the contractor must re-open the 
claim; or (3) the claim was adjudicated, denied and appealed at any 
level. It is important to note that individual claim relief can only be 
provided to an aggrieved party if his or her individual claim or appeal 
has not been paid during the individual claims adjudication process.
    Second, there would be additional relief. Within 30 days of the 
issuance of the administrative decision, we or the contractor would 
have to send a letter to the aggrieved party and the adjudicator 
announcing the intent to either retire the coverage determination, or 
conduct a reconsideration of that policy. As discussed earlier, the 
retirement of a coverage determination means that it can no longer be 
used in the adjudication of claims. And, as also described earlier, a 
reconsideration of a coverage determination could result in a new LCD 
or NCD that does one of the following:
     Supplements the record or rationale and reaffirms the 
coverage determination.
     Revises the coverage determination.
     Retires the coverage determination.
    Supplementing the record could include the addition to the record 
of evidence that was not in the LCD or NCD record, or a more detailed 
rationale as to why the contractor or we believe the LCD or NCD should 
remain in effect. Although the specific language of the LCD or NCD may 
not change in this case, the LCD or NCD would have to be reissued to 
reflect the updated decision and record.
    Under Sec. 426.462, ``Notice of an ALJ's administrative decision,'' 
we are proposing that after the ALJ has made a decision regarding an 
LCD complaint, the ALJ would send a written notice of the 
administrative decision to each party. The notice must contain a 
finding with respect to the LCD complaint and inform each party to the 
determination of his or her rights to seek further review if he or she 
is dissatisfied with the determination, and the time limit under which 
an appeal must be requested.
    Under Sec. 426.562, ``Notice of the Board's administrative 
decision,'' we are proposing that after the Board has made a decision 
regarding an NCD complaint, the Board would send a written notice of 
the administrative decision to each party. The notice must contain a 
finding with respect to the coverage complaint and inform each party to 
the determination of his or her rights to seek further review if he or 
she is dissatisfied with the determination, and the time limit under 
which an appeal must be requested.
    In the remainder of the sections proposed in subpart D, we would 
set forth the procedure for appealing an ALJ's administrative decision 
regarding an LCD review. In Sec. 426.465(a), we are proposing that an 
aggrieved party may appeal part or all of an ALJ's administrative 
decision that states that a provision of the LCD listed in the 
complaint is valid under the reasonableness standard, or that dismisses 
a complaint (with certain exceptions). We would also allow an aggrieved 
party who was part of a joint complaint or a consolidated LCD review to 
appeal an ALJ's administrative decision either independently or as a 
group.
    In Sec. 426.465(b), we are proposing that we or our contractor be 
allowed to appeal an ALJ decision that an LCD was unreasonable to the 
Board.
    In Sec. 426.465(c), we are proposing that the implementation of the 
ALJ decision will be stayed pending review by the Board.
    In Sec. 426.465(d), we are proposing not to allow an aggrieved 
party to appeal a dismissal in certain circumstances, namely, if the 
aggrieved party who filed the complaint withdraws the complaint, or 
because the contractor retired the LCD.
    Under Sec. 426.465(e), we are proposing that an appeal would have 
to be submitted to the Board within 60 calendar days of the date the 
ALJ's administrative decision was issued. We believe this is a 
reasonable timeframe to allow a party to make a decision on whether to 
appeal and to prepare the necessary documents, but we would permit the 
Board to consider a late appeal if good cause is shown by the party.

[[Page 54545]]

    Section 426.465(f) would list the necessary components of an appeal 
to identify the relevant parties and issues.
    In Sec. 426.565, ``Board's role in making an LCD or NCD review 
record available,'' we are proposing that upon a request from a Federal 
Court, the Board must provide to the Federal Court, a copy of the 
Board's LCD or NCD review record (as described in Sec. 426.567).
    In Sec. 426.467, ``Board's LCD review record,'' we are proposing in 
paragraph (a) that except as provided in paragraph (b) of this section, 
the Board's LCD review record consists of any document or material that 
the Board compiled or considered during an LCD review, including, but 
not limited to, the following:
     The LCD complaint.
     The LCD and LCD record.
     The supplemental LCD record, if applicable.
     The Board's administrative decision.
     Transcripts of record.
     Any other relevant evidence gathered under Sec. 426.440.
    We are proposing in paragraph (b) that the LCD record would not 
include material that is privileged or otherwise prohibited from 
release by Federal law.
    In Sec. 426.567, ``Board's NCD review record,'' we are proposing in 
paragraph (a) that except as provided in paragraph (b) of this section, 
the Board's NCD review record consists of any document or material that 
the Board compiled or considered during an NCD review, including, but 
not limited to, the following:
     The NCD complaint.
     The NCD and NCD record.
     The supplemental NCD record, if applicable.
     The Board's administrative decision.
     Transcripts of record.
     Any other relevant evidence gathered under Sec. 426.540.
    We are proposing in paragraph (b) that the NCD record would not 
include material that is privileged or otherwise prohibited from 
release by Federal law.
    In Sec. 426.468, we propose that an aggrieved party who initiates 
an LCD review, but does not appeal any part or parts of an ALJ's 
administrative decision to the Board in a timely manner, would waive 
his or her right to any further review of that part or those parts.
    In Sec. 426.470, we are proposing that the Board's role in 
docketing and evaluating the acceptability of appeals of ALJ 
administrative decisions would be similar to the process that an ALJ 
would use in docketing and evaluating the acceptability of a complaint. 
The Board would assign a number to the appeal and determine if it meets 
all of the requirements of an acceptable appeal proposed in 
Sec. 426.465. Unlike the evaluation of an initial complaint, however, 
we would require, in Sec. 426.470(c), that the Board issue an 
administrative decision dismissing an unacceptable appeal, instead of 
allowing an opportunity to amend an unacceptable appeal. If the Board 
determines that the appeal is acceptable, in Sec. 426.465(d), we would 
require the Board to send notification to the aggrieved party (or 
parties), to the contractor, and, if applicable, to us. The Board would 
also request a copy of the LCD review record (discussed later in this 
section of the preamble) from the ALJ who issued the administrative 
decision.
    Upon the request from the Board to provide copies of the LCD review 
record under Sec. 426.470, we would require that an ALJ send a copy of 
the LCD review record to the Board (see Sec. 426.472). Under 
Sec. 426.474, we would describe what the ALJ's LCD review record would 
contain. In general, the LCD review record consists of any document or 
material that the ALJ compiled or considered during the LCD review.
    Once the Board has accepted an appeal to an ALJ's administrative 
decision and received the ALJ's LCD review record, we are proposing in 
Sec. 426.476 the steps that the Board would take in reviewing the ALJ's 
administrative decision. In addition to reviewing the ALJ's LCD review 
record and the ALJ's administrative decision, the Board would allow the 
contractor or, if applicable, us, to submit a statement to the Board 
and the aggrieved party responding to the appeal. The final required 
step in the Board review of an ALJ's administrative decision would be 
to issue an administrative decision, which is discussed in more detail 
later in this section of the preamble. If the appeal of the ALJ's 
administrative decision is based on a disputed issue of fact, we would 
require that the Board base its administrative decision on whether the 
ALJ's administrative decision was supported by substantial evidence on 
the whole from the LCD review record. If the appeal of the ALJ's 
administrative decision is based on a disputed issue of law, we would 
require that the Board base its administrative decision on whether the 
ALJ's administrative decision is erroneous. If the appeal were based 
both on a disputed issue of fact and a disputed issue of law, the Board 
would base its administrative decision on both of the above standards.
    We believe that the Board review of an appeal of an ALJ's 
administrative decision should remain a paper review of existing 
materials. Accordingly, we are proposing, in Sec. 426.476(b), to 
prohibit the Board from considering any issue not raised in the 
parties' briefs, or considering any evidence that is not a part of the 
ALJ's LCD review record. In Sec. 426.476(c), we would establish 
controlling authorities that the Board must consider when reviewing 
appeals of ALJ administrative decisions. These include the applicable 
provisions of the Act, our regulations and rulings, and NCDs.
    In Sec. 426.476(d), we would require the Board to dismiss an appeal 
of an ALJ's administrative decision if the contractor retired the LCD 
during the appeal.
    In Sec. 426.478, we are proposing to allow the contractor to retire 
an LCD during the Board's review of the ALJ's administrative decision. 
As stated in the previous paragraph, this would lead to the Board 
dismissing the appeal.
    In Sec. 426.480, we are proposing to allow a party to withdraw an 
appeal of an ALJ's administrative decision. The provisions proposed in 
this section, for a party acting alone or as part of a joint or 
consolidated appeal, would be the same as the provisions for 
withdrawing a complaint in Sec. 426.423.
    In Sec. 426.482, we would require the issuance and notification of 
a Board administrative decision regarding an appealed ALJ 
administrative decision. These provisions would be the same as the 
provisions we are proposing for the issuance and notification of an ALJ 
administrative decision in Sec. 426.445.
    In Sec. 426.484, we would set forth the mandatory provisions of a 
Board administrative decision regarding an appealed ALJ administrative 
decision. We would require the Board to either dismiss the appeal or, 
for each part of the ALJ's administrative decision named in the appeal, 
to issue a statement either upholding or reversing that part or all of 
the ALJ's administrative decision. Because the Board is conducting a 
review of the ALJ's administrative decision using the ALJ's LCD review 
record, and is not conducting a de novo review of the LCD itself, a 
Board administrative decision either upholding or reversing each part, 
or all of the ALJ's administrative decision is the proper outcome. The 
Board's administrative decision would also be required to include the 
information necessary to identify the appeal, the rationale for the 
Board's administrative decision, and the signature of a Board member.
    In Sec. 426.486, we would prohibit the Board's administrative 
decision from

[[Page 54546]]

including those provisions that we are proposing to exclude from the 
ALJ's administrative decision in Sec. 426.455, for the reasons 
discussed earlier in this preamble. In Sec. 426.488, we would set forth 
the effect of a Board administrative decision. Section 426.488(a) 
explains the relief that would be provided to a successful challenger. 
Moreover, there may be coverage relief. The contractor would have the 
option of either retiring the LCD, or conducting a reconsideration of 
the LCD, if the Board's administrative decision reversed an ALJ finding 
of validity under the reasonableness standard.
    We note that if the Board's administrative decision is the reversal 
of an ALJ's administrative decision that dismissed a complaint 
regarding an LCD, the case would be remanded to the ALJ, and the LCD 
review would continue from the point at which it was dismissed by the 
ALJ.
    We propose permitting the Board to remand cases to the ALJ in a 
limited number of circumstances. In Sec. 426.489(a), we are proposing 
that the Board may remand a case to the OHA, if the ALJ's 
administrative decision that does not comply with Sec. 426.340, 
Sec. 426.405, Sec. 426.450, Sec. 426.455, and Sec. 426.474, or does not 
include:
     Findings of fact.
     Interpretations of law.
     Applications of fact to law.
     Summary of evidence reviewed.
     The signature of the ALJ.
    In Sec. 426.489(b), we propose prohibiting the Board from remanding 
cases to an ALJ to review new or additional LCD evidence submitted 
during an appeal of an LCD complaint to the Board.
    In Sec. 426.489(c), we propose that the Board notify all parties to 
the complaint when an LCD complaint is remanded to OHA. Section 
426.489(d) describes the actions that an ALJ will take upon receipt of 
a coverage complaint remand.
    In Sec. 426.489(d), we propose that upon receipt of Board remand, 
an ALJ will take any action this is consistent with the Board's remand 
order.
    In Sec. 426.490, we are proposing that a decision by the Board 
would constitute a final agency action and would be subject to judicial 
review. Neither the contractor nor we may appeal a Board administrative 
decision.
    In Sec. 426.570, we are proposing that a decision by the Board 
would constitute a final agency action and would be subject to judicial 
review. We may not appeal a Board administrative decision.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, 44 U.S.C. section 3506(c)(2)(A) requires that we 
solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements:

Sections 426.400 and 426.500

    Sections 426.400, Procedure for filing an acceptable complaint to a 
provision (or provisions) of an LCD, and 426.500, Procedure for filing 
an acceptable complaint to a provision or provisions of an NCD, state 
that an aggrieved party may initiate a review of an LCD or NCD, 
respectively, by filing a written complaint and also state what sort of 
information is required in the complaint to justify that he or she 
qualifies as aggrieved party under our proposed definition at 
Sec. 426.110. This documentation would include the certification of the 
beneficiary's treating physician that the beneficiary needs a service, 
and a statement from the treating physician that payment for the 
service is likely to be denied under a coverage determination.
    We estimate that 3,000 LCD and 15 to 20 NCD complaints will be 
filed per year. We estimate that it will take the aggrieved party 4 
hours to draft the complaint and gather the information to send to us. 
Thus, we estimate the national burden would be 12,080 hours annually.
    Other sections discuss the filing of various motions, petitions, 
and notice that the aggrieved party is withdrawing the request for a 
hearing and appeal. These actions are all exempt from the PRA under 5 
CFR 1320.4, Coverage. These actions are part of an administrative 
action; administrative actions are not covered by the PRA or its 
regulations.
    If you comment on these information collection and recordkeeping 
requirements, please mail copies directly to the following:
    Centers for Medicare & Medicaid Services, Office of Information 
Services, Information Technology Investment Management Group, Attn.: 
Julie Brown, CMS-3063-P, Room N2-14-26, 7500 Security Boulevard, 
Baltimore, MD 21244-1850.
    Office of Information and Regulatory Affairs, Office of Management 
and Budget, Room 10235, New Executive Office Building, Washington, DC 
20503, Attn: Brenda Aguilar, CMS Desk Officer.

V. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
all comments we receive by the date and time specified in the DATES 
section of this preamble, and, if we proceed with a subsequent 
document, we will respond to the substantive comments in the preamble 
to that document.

VI. Regulatory Impact Statement

A. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review), as 
amended by Executive Order 13258, and the Regulatory Flexibility Act 
(RFA) (September 19, 1980, Pub. L. 96-354), as amended. Executive Order 
12866 directs agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). A regulatory impact analysis (RIA) must be 
prepared for major rules with economically significant effects ($100 
million or more annually). We believe that this rule will not meet the 
$100 million threshold and, therefore, is not a major rule.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $5 
million or less annually. Individuals and States are not included in 
the definition of a small entity.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory

[[Page 54547]]

impact analysis if a rule may have a significant impact on the 
operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area and has fewer than 100 beds.
    For these reasons, we are not preparing analyses for either the RFA 
or section 1102(b) of the Act because we have determined, and we 
certify, that this rule would not have a significant economic impact on 
a substantial number of small entities or a significant impact on the 
operations of a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in expenditures in any one year by 
State, local, or tribal governments, in the aggregate, or by the 
private sector, of $110 million. We do not believe that this rule would 
have an effect on the governments mentioned, nor would the private 
sector costs associated with the rule be greater than $110 million.

B. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This rule would not have a substantial effect on State or 
local governments.

C. Anticipated Effects

1. Effects on Medicare Beneficiaries
    In developing this proposed rule, we considered how to make it 
user-friendly for the individual beneficiaries who qualify as aggrieved 
parties to initiate the review of an LCD or an NCD. Possible access 
obstacles for some aggrieved parties include limited financial 
resources, limited mobility, various disabilities, absence of legal 
representation, and difficulty in compiling and presenting scientific 
and clinical materials. We have sought to include means to alleviate 
these obstacles as much as possible through this proposed rule, but 
would also expect the ALJs and the Board to use the flexibility 
proposed for them in this rule to respond to obstacles that may 
confront individual aggrieved parties in particular cases.
    Some concerns may remain about how to facilitate participation, 
especially when evidence is taken in person, by aggrieved parties with 
limited mobility or resources. The proposed rule seeks to address this 
by providing for most evidence to be submitted in written form and by 
allowing use of a variety of electronic means for remote attendance at 
any oral proceeding, if one is needed. In addition, the rule provides 
flexibility for ALJs and the Board to tailor proceedings in each case 
to best reflect the needs of the parties, the appropriate scope of 
participation, and the nature of the issues presented.
    While we would require some documentation to support a 
complainant's assertions of being an aggrieved party (see Secs. 426.400 
and 426.500), we would accept that documentation as sufficient to show 
standing to challenge an LCD or an NCD. In this way, we seek to 
minimize disputes over beneficiaries' factual circumstances, to 
alleviate privacy concerns about confidential medical records and other 
patient-specific information, and to reduce any intrusive discovery 
burden on beneficiaries.
    Our intent is to ensure that beneficiaries fully understand these 
rights. Once a final rule is published, we expect to produce a user-
friendly guide that beneficiaries may use to assist them in accessing 
this process. In addition, we specifically request public comments on 
additional procedures, consistent with the statute that would enable 
this process to work more efficiently.
    We have also provided for appropriate measures to be taken to 
address confidentiality and privilege issues relating to privileged or 
confidential trade secrets, commercial information, or financial 
information.
2. Effects on Providers
    We do not believe that the provisions of this rule would have an 
effect on providers, except to the extent that a provider would supply 
documentation that an aggrieved party is in need of a specific service, 
and that payment for the service would likely be denied under the LCD 
or NCD. It would also be possible for a provider to be subpoenaed under 
Secs. 426.435 and 426.535, but proposed Secs. 426.445 and 426.545 would 
allow for compensation under this circumstance. We believe that the 
rule would have an insignificant economic impact on health care 
providers or the health care industry as a whole.
3. Effects on the Medicare Program
    The Medicare program would incur certain administrative costs 
associated with coverage determination reviews, the cost of being a 
party to coverage determination reviews, and the cost of reevaluating 
policies.

D. Alternatives Considered

    We considered various alternative approaches for implementing the 
ALJ or Board administrative decisions with respect to an LCD and NCD. 
One alternative we considered was to allow an ALJ or Board to specify 
the type of relief that would be afforded to the aggrieved party in 
those instances in which an ALJ or the Board issued a finding of 
unreasonable under the reasonableness standard. We contemplated whether 
it would be feasible based on the record developed in this proceeding 
for an ALJ or the Board to order us to make payment for a particular 
claim for the individual. We determined, however, that because the 
record in a policy challenge adjudication focuses on the challenged 
policy, and not on the beneficiary's particular medical circumstances 
or entitlement to Medicare benefits, it would not be possible to allow 
an ALJ or the Board to order payment in those circumstances. In some 
cases, other statutory restrictions may apply for a particular claim 
that would prevent Medicare from making payment even if the LCD or NCD 
were found reasonable. For instance, if care were furnished by an 
excluded physician in other than an emergency situation, section 
1862(e)(1) of the Act would bar Medicare payment. There are other 
examples where rules other than an NCD may lead to the denial of a 
claim. To avoid redundant claims/appeals processes, we have proposed 
that individual relief would be determined through our existing claims 
appeals procedures, but the LCD or NCD that was found unreasonable by 
the ALJ or the Board would not be applied.
    Further, we do not believe that it is appropriate for an ALJ or the 
Board to write or rewrite coverage determinations. LCDs and NCDs are 
based on clinical and scientific evidence to develop policies that are 
both sound and effective, and continue to ensure the highest quality of 
covered care for Medicare recipients. For the sake of continuing to 
ensure that aggrieved parties receive the same quality care as all 
other Medicare recipients, and for the sake of efficiently 
administering this process, we believe that clinicians and scientific 
experts should continue to develop these policies. To have anyone other 
than a clinician or scientific

[[Page 54548]]

expert revise Medicare policy would not be in the best interest of the 
beneficiary that relies on receiving the highest quality care possible.
    In accordance with the provisions of Executive Order 12866, as 
amended by Executive Order 13258, this regulation was reviewed by the 
Office of Management and Budget.

List of Subjects

42 CFR Part 400

    Grant programs-health, Health facilities, Health maintenance 
organizations (HMO), Medicaid, Medicare, Reporting and recordkeeping 
requirements.

42 CFR Part 405

    Administrative practice and procedure, Health facilities, Health 
professions, Kidney diseases, Medicare, Reporting and recordkeeping 
requirements, Rural areas, X-rays.

42 CFR Part 426

    Administrative practice and procedure, Centers for Medicare & 
Medicaid Services, Medicare, Reporting and recordkeeping requirements.
    For the reasons set forth in the preamble, CMS proposes to amend 42 
CFR chapter IV as follows:

PART 400--INTRODUCTION; DEFINITIONS

    1. The authority citation for part 400 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh) and 44 U.S.C. Chapter 35.

    2. Amend Sec. 400.202 by adding the definitions of ``Board'' and 
``Local coverage determination (LCD)'' and by revising the definition 
of ``National coverage determination (NCD)'' to read as follows:


Sec. 400.202  Definitions specific to Medicare.

* * * * *
    Board means the Departmental Appeals Board.
* * * * *
    Local coverage determination (LCD) means a decision by a fiscal 
intermediary or a carrier under Medicare Part A or Part B, as 
applicable, whether to cover a particular service on an intermediary-
wide or carrier-wide basis in accordance with section 1862(a)(1)(A) of 
the Act. An LCD does not include a determination of which code, if any, 
is assigned to a service or a determination with respect to the amount 
of payment to be made for the service.
* * * * *
    National coverage determination (NCD) means a decision that CMS 
makes regarding whether to cover a particular service nationally under 
title XVIII of the Act. An NCD does not include a determination of what 
code, if any, is assigned to a service or a determination with respect 
to the amount of payment to be made for the service.
* * * * *

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

    3. The authority citation for part 405 continues to read as 
follows:

    Authority: Secs. 1102, 1155, 1869(b), 1871, 1872, and 1879 of 
the Social Security Act (42 U.S.C. 1302, 1320c-4, 1395ff(b), 1395hh, 
1395ii, and 1395pp).

    4. Revise Sec. 405.732 to read follows:


Sec. 405.732  Review of a national coverage determination (NCD).

    (a) General. An NCD is a determination by the Secretary with 
respect to whether or not a particular item or service is covered 
nationally under title XVIII. An NCD does not include a determination 
of what code, if any, is assigned to a particular item or service 
covered under title XVIII or a determination with respect to the amount 
of payment made for a particular item or service. NCDs are made under 
section 1862(a)(1) of the Act or other applicable provisions of the 
Act. An NCD is binding on all Medicare carriers, fiscal intermediaries, 
QIOs, HMOs, CMPs, HCPPs, and ALJs.
    (b) Review by ALJ. (1) An ALJ may not disregard, set aside, or 
otherwise review an NCD.
    (2) An ALJ may review the facts of a particular case to determine 
whether an NCD applies to a specific claim for benefits and, if so, 
whether the NCD has been applied correctly to the claim.
    (c) Review by Court. For initial determinations made before October 
1, 2002, and for challenges to an NCD made under section 1862(a)(1) of 
the Act, a court's review of an NCD is limited to whether the record is 
incomplete or otherwise lacks adequate information to support the 
validity of the decision, unless the case has been remanded to the 
Secretary to supplement the record regarding the NCD. The court may not 
invalidate an NCD except upon review of the supplemental record.
    5. Revise Sec. 405.860 to read as follows:


Sec. 405.860  Review of a national coverage determination (NCD).

    (a) General. An NCD is a determination by the Secretary with 
respect to whether or not a particular item or service is covered 
nationally under title XVIII. An NCD does not include a determination 
of what code, if any, is assigned to a particular item or service 
covered under title XVIII or a determination with respect to the amount 
of payment made for a particular item or service. NCDs are made under 
section 1862(a)(1) of the Act or other applicable provisions of the 
Act. An NCD is binding on all Medicare carriers, fiscal intermediaries, 
QIOs, HMOs, CMPs, HCPPs, and ALJs.
    (b) Review by ALJ.
    (1) An ALJ may not disregard, set aside, or otherwise review an 
NCD.
    (2) An ALJ may review the facts of a particular case to determine 
whether an NCD applies to a specific claim for benefits and, if so, 
whether the NCD has been applied correctly to the claim.
    (c) Review by Court. For initial determinations made before October 
1, 2002, and for challenges to an NCD made under section 1862(a)(1) of 
the Act, a court's review of an NCD is limited to whether the record is 
incomplete or otherwise lacks adequate information to support the 
validity of the decision, unless the case has been remanded to the 
Secretary to supplement the record regarding the NCD. The court may not 
invalidate an NCD except upon review of the supplemental record.
    6. Add part 426 to read as follows:

PART 426-REVIEWS OF LOCAL AND NATIONAL COVERAGE DETERMINATIONS

Subpart A--General Provisions
Sec.
426.100  Basis and scope.
426.110  Definitions.
Subpart B--[Reserved]
Subpart C--General Provisions for the Review of LCDs and NCDs
426.300  Review of LCDs, NCDs, and deemed NCDs.
426.310  LCD and NCD reviews and individual claim appeals.
426.320  Challenges to LCDs and NCDs.
426.330  No assignment of rights by an aggrieved party.
426.340  Stay of proceedings for review of new evidence.
Subpart D--Review of an LCD
426.400  Procedure for filing an acceptable complaint to a provision 
(or provisions) of an LCD.
426.405  Authority of the ALJ.
426.406  Ex parte contacts.
426.410  ALJ's role in docketing and evaluating the acceptability of 
LCD complaints.
426.415   CMS's role in the LCD review.
426.418   Contractor's LCD record.

[[Page 54549]]

426.420   Retiring an LCD under review.
426.423   Withdrawing a complaint regarding an LCD under review.
426.425   LCD review.
426.429   Review following supplemental record.
426.430   ALJ's role in determining whether the contractor's LCD 
record is complete and adequate to support the validity of the LCD.
426.431   ALJ's review of the LCD to apply the reasonableness 
standard.
426.432   Discovery.
426.435   Subpoenas.
426.440   Evidence.
426.441   Closing discovery.
426.444   Dismissals for cause.
426.445   Witness fees.
426.446   Record of hearing.
426.447   Issuance and notification of an ALJ's administrative 
decision.
426.450   Mandatory provisions of an ALJ's administrative decision.
426.455   Prohibited provisions of an ALJ's administrative decision.
426.460   Effect of an ALJ's administrative decision.
426.462   Notice of an ALJ's administrative decision.
426.465   Appealing part or all of an ALJ's administrative decision.
426.467   Board's LCD review record.
426.468   Decision to not appeal an ALJ's administrative decision.
426.470   Board's role in docketing and evaluating the acceptability 
of appeals of ALJ administrative decisions.
426.472   ALJ's role in making the LCD review record available.
426.474   ALJ's LCD review record.
426.476   Board review of an ALJ's administrative decision.
426.478   Retiring an LCD during the Board's review of an ALJ's 
administrative decision.
426.480   Withdrawing an appeal of an ALJ's administrative decision.
426.482   Issuance and notification of a Board's administrative 
decision.
426.484   Mandatory provisions of a Board's administrative decision.
426.486   Prohibited provisions of a Board's administrative 
decision.
426.488   Effect of a Board administrative decision.
426.489   Board remand authority.
426.490   Board administrative decision.
Subpart E--Review of an NCD
426.500   Procedure for filing an acceptable complaint to a 
provision or provisions of an NCD.
426.505   Authority of the Board.
426.506   Ex parte contacts.
426.510   Board's role in docketing and evaluating the acceptability 
of NCD complaints.
426.515   CMS's role in making the NCD record available.
426.518   NCD record.
426.520   Repealing an NCD under review.
426.523   Withdrawing a complaint regarding an NCD under review.
426.525   NCD review.
426.529   Review following supplemental record.
426.530   Board's role in determining whether the NCD record is 
complete and adequate to support the validity of the NCD.
426.531   Board's review of the NCD to apply the reasonableness 
standard.
426.532   Discovery.
426.535   Subpoenas.
426.540   Evidence.
426.541   Closing discovery.
426.544   Dismissals for cause.
426.545   Witness fees.
426.546   Record of hearing.
426.547   Issuance, notification, and posting of a Board's 
administrative decision.
426.550   Mandatory provisions of the Board's administrative 
decision.
426.555   Prohibited provisions of the Board's administrative 
decision.
426.560   Effect of the Board's administrative decision.
426.562   Notice of the Board's administrative decision.
426.565   Board's role in making an LCD/NCD review record available.
426.567   Board's NCD review record.
426.570   Board administrative decision.

PART 426--REVIEWS OF LOCAL AND NATIONAL COVERAGE DETERMINATIONS

Subpart A--General Provisions


Sec. 426.100  Basis and scope.

    (a) Basis. This part implements sections 1869(f)(1) and (f)(2) of 
the Act, which provide for the review of LCDs, NCDs, and certain 
determinations that are deemed to be NCDs by statute.
    (b) Scope. This subpart establishes the requirements and procedures 
for the review of LCDs and NCDs.


Sec. 426.110  Definitions.

    For the purposes of this part, the following definitions apply:
    Aggrieved party means a Medicare beneficiary who--
    (1) Is entitled to benefits under Part A, enrolled under Part B, or 
both (including an individual enrolled in fee-for-service Medicare, in 
a Medicare+Choice plan, or in another Medicare managed care plan); and
    (2) Is in need of a service that is the subject of an applicable 
LCD (in the relevant jurisdiction) or an NCD, as documented by the 
beneficiary's treating physician.
    Contractor means a carrier (including a Durable Medical Equipment 
Regional Carrier), or a fiscal intermediary (including a Regional Home 
Health Intermediary) that has jurisdiction for the LCD at issue.
    Deemed NCD means a determination that the Secretary makes, in 
response to a request for an NCD by an aggrieved party under section 
1869(f)(4)(B) and (C) of the Act, that no national coverage or 
noncoverage determination is appropriate, or the Secretary failed to 
meet the deadline under section 1869(f)(4)(iv) of the Act.
    New evidence means clinical or scientific evidence that was not 
previously considered by CMS or the contractor before the NCD or LCD 
was issued.
    Party means an individual who has a right to participate in the LCD 
or NCD review process. A party includes an aggrieved party, a 
contractor, and, as appropriate, CMS.
    Reasonableness standard means the standard that an ALJ or the Board 
must apply when conducting an LCD or an NCD review. In determining 
whether NCDs or LCDs are valid, the adjudicator must uphold a 
challenged policy (or a provision or provisions of a challenged policy) 
if the findings of fact, interpretations of law, and applications of 
fact to law by CMS or the contractor are reasonable based on the NCD or 
LCD record.

Subpart B--[Reserved]

Subpart C--General Provisions for the Review of LCDs and NCDs


Sec. 426.300  Review of LCDs, NCDs, and deemed NCDs.

    (a) Upon the receipt of an acceptable LCD complaint as described in 
Sec. 426.400, an ALJ conducts a review of a challenged provision (or 
provisions) of an LCD using the reasonableness standard.
    (b) Upon the receipt of an acceptable NCD complaint as described in 
Sec. 426.500, the Board conducts an NCD review of a challenged 
provision (or provisions) of an NCD using the reasonableness standard.
    (c) The procedures established in this part governing the review of 
NCDs also apply in cases in which a deemed NCD is challenged.


Sec. 426.310  LCD and NCD reviews and individual claim appeals.

    (a) LCD and NCD reviews are independent of the claims appeal 
processes set forth in part 405, subparts F and G; part 417, subpart Q; 
and part 422, subpart M of this chapter.
    (b) An aggrieved party must notify the OHA or the Board, as 
appropriate, regarding the submission and disposition of any pending 
claim or appeal relating to the subject of the aggrieved party's LCD or 
NCD complaint. This reporting obligation continues throughout the 
entire LCD or NCD review process.


Sec. 426.320  Challenges to LCDs and NCDs.

    (a) Right to challenge. Only an aggrieved party may initiate a 
review to

[[Page 54550]]

challenge an existing specific provision or provisions of an LCD or NCD 
by filing an acceptable complaint.
    (b) Exclusions from review. Some items are not reviewable under 
this part, including:
    (1) Pre-decisional materials, including--
    (i) Draft LCDs;
    (ii) Template LCDs or suggested LCDs; and
    (iii) Draft NCDs, including national coverage decision memoranda.
    (2) Retired LCDs or NCDs that are no longer in effect.
    (3) Interpretive policies that are not an LCD or NCD.
    (4) Contractor decisions that are not based on section 
1862(a)(1)(A) of the Act.
    (5) Contractor claims processing edits.
    (6) Payment amounts or methodologies.
    (7) Coding issues, including determinations, methodologies, 
definitions, or rules.
    (8) Contractor bulletin articles, educational materials, or web 
site frequently asked questions.
    (9) Any M+C organization or managed care plan policy, rule, or 
procedure.
    (10) An individual claim determination.
    (11) Any other policy that is not an LCD or an NCD as set forth in 
Sec. 400.202 of this chapter.


Sec. 426.330  No assignment of rights by an aggrieved party.

    (a) Assignment of rights. An aggrieved party may not assign his or 
her rights to file a complaint to a provision (or provisions) of an LCD 
or NCD to any other individual or entity. Neither an ALJ nor the Board 
will recognize as valid any attempt to assign rights under section 
1869(f) of the Act.
    (b) Burden of proof. During an LCD or NCD review, an aggrieved 
party bears the burden of proof and the burden of persuasion for the 
issue(s) raised in a complaint. The burden of persuasion will be judged 
by a preponderance of the evidence.


Sec. 426.340  Stay of proceedings for review of new evidence.

    (a) If an aggrieved party submits new evidence, or the Board or ALJ 
admits new evidence, pertaining to an LCD or NCD, the Board or ALJ will 
send the new evidence to CMS or the contractor for review. Upon review 
of this new evidence, CMS or the contractor will determine whether a 
request for stay of administrative proceedings under this part 426 to 
consider the additional clinical or scientific evidence is necessary. 
Upon such a request, the Board or ALJ will do the following:
    (1) Stay the proceedings.
    (2) Set a reasonable timeframe within which CMS or the contractor 
will complete the review.
    (3) Upon request of CMS or the contractor, extend the timeframe for 
the period of time requested by CMS or the contractor, unless the 
aggrieved party can demonstrate that the CMS contractor request is 
unreasonable.
    (b) Following the CMS or the contractor review of this new 
evidence, CMS or the contractor will file a supplemental record.

Subpart D--Review of an LCD


Sec. 426.400  Procedure for filing an acceptable complaint to a 
provision (or provisions) of an LCD.

    (a) The complaint. An aggrieved party may initiate a review of an 
LCD by filing a written complaint with the Social Security 
Administration, Office of Hearings and Appeals (OHA).
    (b) Timeliness of a complaint. The OHA must receive a complaint 
within 6 months of the written statement described in paragraph 
(c)(1)(vi) of this section.
    (c) Components of a valid complaint. A complaint must contain the 
following information:
    (1) Beneficiary-identifying information:
    (i) Beneficiary's name.
    (ii) Beneficiary's mailing address.
    (iii) Beneficiary's State of residence, if different from mailing 
address.
    (iv) Beneficiary's telephone number.
    (v) Beneficiary's Health Insurance Claim number.
    (vi) A copy of the treating physician's certification that, in his 
or her medical opinion, the beneficiary needs the service that is the 
subject of the LCD.
    (vii) A statement from the treating physician that Medicare 
coverage for the service needed is likely to be denied under the 
applicable contractor's LCD.
    (2) LCD-identifying information:
    (i) Name of the contractor using the LCD.
    (ii) Title of final LCD being challenged.
    (iii) The specific provision (or provisions) of the LCD adversely 
affecting the aggrieved party.
    (3) Aggrieved party statement. A statement from the aggrieved party 
explaining the rationale for the allegation that the provision(s) of 
the LCD is (are) not valid under the reasonableness standard, and 
whether the aggrieved party has received the service related to the 
LCD.
    (4) Clinical or scientific evidence. Copies of clinical or 
scientific evidence that supports the complaint.
    (d) Joint complaints--(1) Conditions for a joint compliant. Two or 
more aggrieved parties may initiate the review of an LCD by filing a 
single written complaint with the OHA if all of the following 
conditions are met:
    (i) Each aggrieved party named in the joint complaint has a similar 
medical condition.
    (ii) Each aggrieved party named in the joint complaint is filing 
the complaint in regard to the same provision(s) of the same LCD.
    (2) Components of a valid joint complaint. A joint complaint must 
contain the following information:
    (i) The beneficiary-identifying information described in paragraph 
(c)(1) of this section for each aggrieved party named in the joint 
complaint.
    (ii) The LCD-identifying information described in paragraph (c)(2) 
of this section.
    (iii) The documentation described in paragraphs (c)(3) and (c)(4) 
of this section.
    (3) Timeliness of a joint complaint. The OHA must receive a joint 
complaint within 6 months of the date of the documentation from each 
aggrieved party's treating physician expressing the belief that payment 
for the needed service would likely be denied under the LCD in 
question.


Sec. 426.405  Authority of the ALJ.

    (a) An ALJ conducts a fair and impartial hearing, avoids 
unnecessary delay, maintains order, and ensures that all proceedings 
are recorded.
    (b) An ALJ defers only to reasonable findings of fact, reasonable 
interpretations of law, and reasonable applications of fact to law by 
the Secretary.
    (c) The ALJ has the authority to do any of the following:
    (1) Review complaints by an aggrieved party (or aggrieved parties).
    (2) Dismiss complaints that fail to comply with Sec. 426.400.
    (3) Set and change the date, time, and place of a hearing upon 
reasonable notice to the parties to the review.
    (4) Continue or recess a hearing for a reasonable period of time.
    (5) Hold conferences to identify or simplify the issues, or to 
consider other matters that may aid in the expeditious disposition of 
the proceeding.
    (6) Consult with scientific and clinical experts on his or her own 
motion concerning clinical or scientific evidence.
    (7) Set schedules for submission of exhibits and written reports of 
experts.
    (8) Administer oaths and affirmations.
    (9) Examine witnesses.

[[Page 54551]]

    (10) Issue subpoenas requiring the attendance of witnesses at 
hearings as permitted by this part.
    (11) Issue subpoenas requiring the production of existing documents 
before, and relating to, the hearing as permitted by this part.
    (12) Rule on motions and other procedural matters.
    (13) Regulate the scope and timing of documentary discovery as 
permitted by this part.
    (14) Regulate the course of a hearing and the conduct of 
representatives, parties, and witnesses.
    (15) Receive, rule on, exclude, or limit evidence, in accordance 
with Sec. 426.340.
    (16) Take official notice of facts, upon motion of a party.
    (17) Decide cases, upon the motion of a party, by summary judgment 
when there is no disputed issue of material fact.
    (18) Conduct any conference, argument, or hearing in person or, 
upon agreement of the parties, by telephone, picture-tel, or any other 
means.
    (19) Issue administrative decisions.
    (20) Exclude a party to an LCD review (or a party's representative) 
for failure to comply with an ALJ order or procedural request without 
good cause.
    (d) The ALJ does not have authority to do any of the following 
under this part:
    (1) Conduct an LCD review or conduct LCD hearings on his or her own 
motion or on the motion of a nonaggrieved party.
    (2) Receive or accept any new evidence without following 
Sec. 426.340.
    (3) Review any decisions by contractors to develop a new or revised 
LCD.
    (4) Conduct an LCD review of any draft, retired, template, or 
suggested LCDs.
    (5) Conduct a review of any NCD according to section 
1869(f)(1)(A)(i) of the Act.
    (6) Conduct a review of the merits of an invalid LCD complaint.
    (7) Conduct a review of any policy that is not an LCD, as defined 
in Sec. 400.202 of this chapter.
    (8) Compel mediation or settlement negotiations by aggrieved 
parties.
    (9) Deny a request for withdrawal of a complaint by an aggrieved 
party.
    (10) Compel the contractor to conduct studies, surveys, or develop 
new information to support an LCD record.
    (11) Deny a contractor the right to retire an LCD.
    (12) Deny a contractor or CMS the right to conduct a 
reconsideration review when any party submits new evidence.
    (13) Make a determination under Sec. 426.441 before a contractor's 
reconsideration of new evidence as described in Sec. 426.340.
    (14) Compel CMS or its contractors to conduct studies, surveys, or 
develop new information to support an LCD record.
    (15) Find invalid applicable Federal statutes, regulations, rulings 
or NCDs.
    (16) Enter an administrative decision defining the specific terms 
of a subsequent LCD.


Sec. 426.406  Ex parte contacts.

    No party or person (except employees of the ALJ's office) will 
communicate in any way with the ALJ on any substantive matter at issue 
in a case, unless on notice and opportunity for all parties to 
participate. This provision does not prohibit a person or party from 
inquiring about the status of a case or asking routine questions 
concerning administrative functions or procedures.


Sec. 426.410  ALJ's role in docketing and evaluating the acceptability 
of LCD complaints.

    (a) Docketing the complaint. The Office of Hearings and Appeals 
does the following upon receiving a complaint regarding an LCD:
    (1) Dockets the complaint.
    (2) Forwards the complaint to the selected ALJ.
    (b) Evaluating the acceptability of the complaint. The ALJ assigned 
to the LCD review determines if the complaint is acceptable by 
confirming all of the following:
    (1) The complaint is being submitted by an aggrieved party or, in 
the case of a joint complaint, that each individual named in the joint 
complaint is an aggrieved party. (In determining if a complaint is 
acceptable, the ALJ will assume that the facts alleged by the treating 
physician's statement regarding the aggrieved party's (or parties) 
clinical condition are true.)
    (2) The complaint meets the requirements for a valid complaint in 
Sec. 426.400 and does not challenge one of the documents in 
Sec. 426.320(b).
    (c) Unacceptable complaint.
    (1) If the ALJ determines that the complaint is unacceptable, the 
ALJ must provide the aggrieved party (or parties) one opportunity to 
amend the unacceptable complaint.
    (2) If the aggrieved party (or parties) fail(s) to submit an 
acceptable amended complaint within a reasonable timeframe as 
determined by the ALJ, the ALJ must issue an administrative decision 
dismissing the unacceptable complaint.
    (d) Acceptable complaint. If the ALJ determines that the complaint 
(or amended complaint) is acceptable, the ALJ does the following:
    (1) Sends a letter to the aggrieved party (or parties) 
acknowledging the complaint and informing the aggrieved party (or 
parties) of the docket number.
    (2) Forwards a copy of the complaint and the letter described in 
paragraph (d)(1) of this section to the applicable contractor and CMS.
    (3) Requests that CMS or the contractor send a copy of the LCD 
record to the ALJ and all parties to the LCD review.
    (e) Consolidation of complaints regarding an LCD--(1) Criteria for 
consolidation. If two or more aggrieved parties submit separate 
acceptable complaints regarding the same provision(s) of the same LCD, 
an ALJ may, upon his or her own motion or by motion of any party to the 
LCD review, consolidate the complaints and conduct a consolidated LCD 
review if all of the following criteria are met:
    (i) The complaints are in regard to the same provision(s) of the 
same LCD.
    (ii) The complaints contain common questions of law, common 
questions of fact, or both.
    (2) Decision to consolidate complaints. If an ALJ decides to 
consolidate complaints, the ALJ does the following:
    (i) Provides notification that the LCD review will be consolidated 
and informs all parties of the new docket number.
    (ii) Makes a single record of the proceeding.
    (iii) Considers the relevant evidence introduced in each LCD 
challenge as introduced in the consolidated review.
    (3) Decision not to consolidate complaints. If an ALJ decides not 
to consolidate complaints, the ALJ conducts separate LCD reviews for 
each complaint.


Sec. 426.415  CMS's role in the LCD review.

    CMS will provide to the ALJ, and all parties to the LCD review, 
information identifying the person who will represent the contractor, 
if necessary, in the LCD review process.


Sec. 426.418  Contractor's LCD record.

    (a) Elements of a contractor's LCD record. Except as provided in 
paragraph (b) of this section, the contractor's LCD record consists of 
any document or material that the contractor considered during the 
development of the LCD, including, but not limited to, the following:
    (1) The LCD being challenged.
    (2) Any relevant medical evidence considered on or before the date 
the LCD was issued, including, but not limited to, the following:
    (i) Scientific articles.
    (ii) Technology assessments.

[[Page 54552]]

    (iii) Clinical guidelines.
    (iv) Records from the Food and Drug Administration regarding safety 
and efficacy of a drug or device,
    (v) Statements from clinical experts, medical textbooks, claims 
data, or other indication of medical standard of practice.
    (3) Comment and Response Document (a summary of comments received 
by the contractor concerning the draft LCD).
    (b) Documents excluded from the contractor's LCD record. The LCD 
record does not include the following:
    (1) Material that is privileged.
    (2) Any new evidence.
    (3) Proprietary data.


Sec. 426.420  Retiring an LCD under review.

    A contractor may retire an LCD under review before the date the ALJ 
issues an administrative decision regarding that LCD. Retiring an LCD 
under review has the same effect as an administrative decision under 
Sec. 426.460(b).


Sec. 426.423  Withdrawing a complaint regarding an LCD under review.

    (a) Circumstance under which an aggrieved party may withdraw a 
complaint regarding an LCD. An aggrieved party who filed a complaint 
regarding an LCD may withdraw the complaint before the ALJ issues an 
administrative decision regarding that LCD. The aggrieved party may not 
file another complaint to the same coverage determination for 6 months.
    (b) Process for an aggrieved party withdrawing a complaint 
regarding an LCD. To withdraw a complaint regarding an LCD, the 
aggrieved party who filed the complaint must send a written notice 
announcing the intent to withdraw to the OHA (see Sec. 426.400), CMS 
(if applicable), and the applicable contractor.
    (c) Actions the ALJ must take upon receiving a notice announcing 
the intent to withdraw a complaint regarding an LCD--(1) LCD reviews 
involving one aggrieved party. If the ALJ receives a notice announcing 
the intent to withdraw a complaint regarding an LCD before the date the 
ALJ issued an administrative decision regarding that LCD, the ALJ 
issues an administrative decision dismissing the complaint under 
Sec. 426.444 and informing the aggrieved party that he or she may not 
file another complaint to the same coverage determination for 6 months.
    (2) LCD reviews involving joint complaints. If the ALJ receives a 
notice from an aggrieved party who is named in a joint complaint 
announcing the intent to withdraw a complaint regarding an LCD before 
the date the ALJ issued an administrative decision regarding that LCD, 
the ALJ issues an administrative decision dismissing only that 
aggrieved party from the complaint under Sec. 426.444. The ALJ 
continues the LCD review if there is one or more aggrieved party who 
does not withdraw from the joint complaint.
    (3) Consolidated LCD reviews. If the ALJ receives a notice from an 
aggrieved party who is part of a consolidated LCD review announcing the 
intent to withdraw a complaint regarding an LCD before the date the ALJ 
issued an administrative decision regarding that LCD, the ALJ removes 
that aggrieved party from the consolidated LCD review and issues an 
administrative decision dismissing that aggrieved party's complaint 
under Sec. 426.444. The ALJ continues the LCD review if there is one or 
more aggrieved parties who does not withdraw from the joint complaint.


Sec. 426.425  LCD review.

    (a) Opportunity for the aggrieved party to state that the 
contractor's LCD record is not complete, not adequate to support the 
validity of the LCD, or both: Upon receipt of the contractor's LCD 
record, the aggrieved party who submitted the complaint may file a 
motion alleging that the contractor's LCD record is not complete, not 
adequate to support the validity of the LCD, or both. This motion must 
be submitted to the ALJ, the contractor, or CMS, as appropriate, within 
30 days (or within additional time as allowed by the ALJ) of the date 
the aggrieved party receives the contractor's LCD record.
    (1) If an aggrieved party does not file a motion alleging that the 
contractor's LCD record is incomplete or lacks adequate information to 
support the validity of the LCD, then the ALJ makes a determination 
whether the LCD record is complete and adequate, as described in 
Sec. 426.430(a).
    (2) If an aggrieved party files a motion alleging that the 
contractor's LCD record is not complete, not adequate to support the 
validity of the LCD, or both, based on clinical and scientific evidence 
contained in the LCD record, then the ALJ makes a determination whether 
the LCD record is complete and adequate, as described in 
Sec. 426.430(b).
    (3) If an aggrieved party files a motion alleging that the 
contractor's LCD record is not complete, not adequate to support the 
validity of the LCD, or both, based on new evidence, then the ALJ stays 
the proceeding upon request by the contractor or CMS as described in 
Sec. 426.340.
    (b) The aggrieved party may file a petition with the ALJ requesting 
additional time to review the contractor's LCD record. This petition 
must be submitted to the ALJ within 30 days of the receipt of the LCD 
record (or within additional time as allowed by the ALJ). This petition 
shall be in writing, shall state the reason(s) why the request for 
extension is being made, and the amount of additional time needed to 
review the contractor's LCD record. The ALJ may extend the time for 
reviewing the contractor's LCD case file by an aggrieved party for a 
reasonable period of time.


Sec. 426.429  Review following supplemental record.

    (a) Opportunity for the aggrieved party to review the supplemental 
LCD record. Upon receipt of the contractor's supplemental LCD record, 
following a reconsideration under Sec. 426.340, the aggrieved party who 
submitted the complaint may file a motion alleging that the 
contractor's LCD record is not complete, not adequate to support the 
validity of the LCD, or both. This motion must be submitted to the ALJ, 
the contractor, and CMS within 30 days (or within additional time as 
allowed by the ALJ) of the date the aggrieved party receives the 
supplemental LCD record.
    (1) If an aggrieved party does not file a motion alleging that the 
contractor's supplemental LCD record is incomplete or lacks adequate 
information to support the validity of the LCD, then the ALJ makes a 
determination whether the LCD record is complete and adequate, as 
described in Sec. 426.430(a).
    (2) If an aggrieved party files a motion alleging that the 
contractor's LCD record is not complete, not adequate to support the 
validity of the LCD, or both, based on clinical and scientific evidence 
contained in the LCD record, then the ALJ makes a determination whether 
the LCD record is complete and adequate, as described in 
Sec. 426.430(b).
    (3) If an aggrieved party files a motion alleging that the 
contractor's supplemental LCD record is not complete, not adequate to 
support the validity of the LCD, or both, based on new evidence, then 
the ALJ stays the proceeding upon request by the contractor or CMS as 
described in Sec. 426.340.
    (b) Request for additional time to review the contractor's 
supplemental LCD record by the aggrieved party. The aggrieved party may 
file a petition with the ALJ requesting additional time to review the 
contractor's supplemental LCD record. This petition must be submitted 
to the ALJ within 30 days of the filing of the supplemental record (or 
within additional time as allowed by the ALJ). Such petition shall be 
in writing, shall state the reason(s) why the request

[[Page 54553]]

for extension is being made, and the amount of time needed to review 
the contractor's supplemental LCD record. The ALJ may extend the time 
for reviewing the contractor's supplemental LCD record for a reasonable 
period of time


Sec. 426.430  ALJ's role in determining whether the contractor's LCD 
record is complete and adequate to support the validity of the LCD.

    (a) If the aggrieved party does not file a motion described in 
Sec. 426.425(a) or Sec. 426.429(a), the ALJ reviews the contractor's 
LCD record and applies the reasonableness standard, as described in 
Sec. 426.431.
    (b) If the aggrieved party files a motion described in 
Sec. 426.425(a) or Sec. 426.429(a), the ALJ must do the following:
    (1) Allow the contractor or CMS to submit a statement to the ALJ 
and the aggrieved party responding to the motion described in paragraph 
(a) of this section. This statement must be submitted within 30 days 
(or within additional time as allowed by the ALJ) of the date the 
contractor receives the statement from the aggrieved party described in 
paragraph (a) of this section.
    (2) Review the contents of the LCD record, as described in 
Sec. 426.418.
    (3) Hold conferences, if necessary, which may be conducted (at the 
ALJ's discretion) either in person, or, by mutual agreement of the 
parties, by telephone, picture-tel, or any other means agreed upon by 
all parties involved.
    (4) Determine whether the contractor's LCD record is complete and 
adequate to support the validity of the LCD.
    (c) ALJ's determination of the completeness of the contractor's LCD 
record, and the determination of contractor's LCD record's adequacy to 
support the validity of the LCD:
    (1) ALJ determination that the contractor's LCD record is complete 
and adequate to support the validity of the LCD. If the ALJ determines 
that the contractor's LCD record is complete and adequate to support 
the validity of the LCD, the ALJ does the following:
    (i) Sends a letter to the aggrieved party, the contractor, and CMS 
stating that the ALJ finds the contractor's LCD record to be complete 
and adequate to support the validity of the LCD.
    (ii) Reviews the provision(s) of the LCD listed in the complaint 
based on the reasonableness standard as described in Sec. 426.431.
    (2) ALJ determination that the contractor's LCD record is not 
complete, not adequate to support the validity of the LCD, or both. If 
the ALJ determines that the contractor's LCD record is not complete, 
not adequate to support the validity of the LCD, or both, the ALJ does 
the following:
    (i) Sends a letter to the aggrieved party, the contractor, and CMS 
(if applicable) stating that the contractor's LCD record is not 
complete, not adequate to support the validity of the LCD, or both.
    (ii) Allows discovery as described in Sec. 426.432.
    (iii) Upon admission of new evidence, follows the process for 
review of new evidence as described in Sec. 426.340.
    (iv) Reviews the provision(s) of the LCD listed in the complaint to 
apply the reasonableness standard as described in Sec. 426.431.


Sec. 426.431  ALJ's review of the LCD to apply the reasonableness 
standard.

    (a) Required steps. An ALJ must do the following to review the 
provision(s) listed in the aggrieved party's complaint based on the 
reasonableness standard:
    (1) Confine the LCD review to the provision(s) of the LCD raised in 
the aggrieved party's complaint filed with the OHA, and to clinical or 
scientific evidence that is contained in the LCD record (or 
supplemental record).
    (2) Close the LCD review record to the taking of evidence.
    (3) Issue an administrative decision as described in Sec. 426.447.
    (b) Optional steps. The ALJ may do the following to apply the 
reasonableness standard to the provision(s) listed in the aggrieved 
party's complaint:
    (1) Conduct a hearing, and allow subpoenas as described in 
Sec. 426.435 and the taking of evidence as described in Sec. 426.440.
    (2) At a hearing, consult with appropriate scientific or clinical 
experts concerning clinical or scientific evidence.
    (3) Consider any previous ALJ administrative decision made under 
Sec. 426.447 regarding the same provision(s) of the LCD under review.
    (4) Consider any previous Board administrative decision made under 
Sec. 426.482 regarding the same provision(s) of the LCD under review.
    (c) Authority for ALJs in LCD reviews when applying the 
reasonableness standard. In applying the reasonableness standard to a 
provision (or provisions) of an LCD, the ALJ must follow the applicable 
provisions of the following:
    (1) The Social Security Act.
    (2) CMS regulations.
    (3) CMS rulings.
    (4) NCDs.


Sec. 426.432  Discovery.

    (a) General rules. If the ALJ orders discovery, the ALJ does the 
following:
    (1) Establishes a reasonable timeframe for discovery.
    (2) Ensures that a party to the LCD review who receives a discovery 
request has certain rights that include, but are not limited to, the 
following:
    (i) The right to select and use an attorney or other representative 
during the discovery process.
    (ii) The right to submit discovery responses, objections, motions, 
or other pertinent materials to the ALJ.
    (3) Ensures that a nonparty to the LCD review who receives a 
discovery request has the same rights in responding to a discovery 
request as any party.
    (b) Protective orders--(1) Request for a protective order. Any 
party or nonparty receiving a discovery request may file a motion for a 
protective order before the date of production of the discovery.
    (2) The ALJ granting of a protective order. The ALJ may grant a 
motion for a protective order if (s)he finds that the discovery 
sought--
    (i) Is irrelevant;
    (ii) Is unduly costly or burdensome;
    (iii) Will unduly delay the proceeding;
    (iv) Is privileged under Federal law; or
    (v) Is proprietary data.
    (c) Types of discovery available. A party may make a request to 
another party or nonparty for production of documents relating to a 
specific LCD.
    (d) Types of documents. For the purpose of this section, the term 
``documents'' includes relevant information, reports, answers, records, 
accounts, papers, and other data and documentary evidence. Nothing 
contained in this section will be interpreted to require the creation 
of a document.
    (e) Types of discovery not available. Requests for admissions, 
depositions, written interrogatories, or any other forms of discovery, 
other than those permitted under paragraph (d) of this section, are not 
authorized.
    (f) Privileged documents--(1) Options for the ALJ. The ALJ may, in 
appropriate circumstances, do any of the following:
    (i) Order CMS to provide an index of any documents withheld on the 
basis of privilege and to state the basis for the privilege claim.
    (ii) Conduct an in-camera review of any documents withheld on the 
basis of privilege.
    (2) Confidentiality. If the ALJ orders the release of any document 
when

[[Page 54554]]

privilege was asserted, the ALJ must order that all names or 
identifying information that is not relevant to the specific LCD be 
redacted from the document.


Sec. 426.435  Subpoenas.

    (a) Purpose of a subpoena. A subpoena requires the attendance of an 
individual at a hearing and may also require the individual (whether or 
not the individual is a party) to produce evidence authorized under 
Sec. 426.440 at or before the hearing.
    (b) Filing a motion for a subpoena. A party seeking a subpoena must 
file a written motion with the ALJ not less than 30 days before the 
date fixed for the hearing. The motion must do all of the following:
    (1) Designate the witnesses.
    (2) Specify any evidence to be produced.
    (3) Describe the address and location with sufficient particularity 
to permit the witnesses to be found.
    (4) State the pertinent facts that the party expects to establish 
by the witnesses or documents and whether the facts could be 
established by other evidence without the use of a subpoena.
    (c) Response to a motion for a subpoena. Within 15 days after the 
written motion requesting issuance of a subpoena is served on all 
parties, any party may file an opposition to the motion or other 
response.
    (d) Extension for good cause. The ALJ may modify the deadlines 
specified in paragraphs (b) and (c) of this section for good cause.
    (e) Motion for a subpoena granted. If the ALJ grants a motion 
requesting issuance of a subpoena, the subpoena must do the following:
    (1) Be issued in the name of the ALJ.
    (2) Include the docket number and title of the LCD under review.
    (3) Provide notice that the subpoena is issued according to 
sections 1872 and 205(d) and (e) of the Act.
    (4) Specify the time and place at which the witness is to appear 
and any evidence the witness is to produce.
    (f) Delivery of the subpoena. The party seeking the subpoena will 
serve it by personal delivery to the individual named, or by certified 
mail return receipt requested, addressed to the individual at his or 
her last dwelling place or principal place of business.
    (g) Motion to quash a subpoena. The individual to whom the subpoena 
is directed may file with the ALJ a motion to quash the subpoena within 
10 days after service.
    (h) Refusal to obey a subpoena. The exclusive remedy for contumacy 
by, or refusal to obey a subpoena duly served upon, any person is 
specified in section 205(e) of the Act (42 U.S.C. 405(e)).


Sec. 426.440  Evidence.

    (a) The ALJ determines the admissibility of evidence consistent 
with Sec. 426.340.(b) Except as provided in this part, the ALJ is not 
bound by the Federal Rules of Evidence. However, the ALJ may apply the 
Federal Rules of Evidence when appropriate, for example, to exclude 
unreliable evidence.
    (b) The ALJ must exclude evidence that (s)he determines is clearly 
irrelevant or immaterial.
    (c) Although relevant, the ALJ must exclude evidence if the ALJ 
determines it is privileged under Federal law.
    (d) Consistent with Sec. 426.340, the ALJ may permit the parties to 
introduce the testimony of scientific and clinical experts, rebuttal 
witnesses, and other relevant evidence, only if the testimony is 
related to evidence that was considered in the LCD. This testimony may 
be submitted in the form of a written report, accompanied by the 
curriculum vitae of the expert preparing the report.
    (e) Experts submitting reports must be available for cross-
examination at an evidentiary hearing upon request of the ALJ or a 
party to the proceeding, or the reports will be excluded from the 
record.
    (f) All documents and other evidence offered or taken for the 
record will be open to examination by all parties, unless otherwise 
ordered by the ALJ for good cause shown.


Sec. 426.441  Closing discovery.

    Upon completion of discovery, the ALJ will notify all parties in 
writing that the discovery period is closed.


Sec. 426.444  Dismissals for cause.

    (a) The ALJ may, at the request of any party, or on his or her own 
motion, dismiss a complaint if the aggrieved party (or his or her 
representative) fails to do either of the following:
    (1) Attend or participate in a prehearing conference or hearing 
without good cause.
    (2) Comply with a lawful order of the ALJ.
    (b) The ALJ must dismiss any provision(s) of a complaint in any of 
the following circumstances:
    (1) The ALJ does not have the authority to rule on that provision 
under Sec. 426.405(d).
    (2) The complaint is not timely. (See Sec. 426.400(b).)
    (3) The complaint is not filed by an aggrieved party, or is filed 
by an individual who is unable to demonstrate that he or she is in need 
of a particular service. (See Sec. 426.400.)
    (4) The aggrieved party no longer needs the service because the 
aggrieved party has received the service before the aggrieved party 
filed the complaint with the OHA. Except for an individual who has a 
continuing need for a particular item or service that is subject to an 
LCD.
    (5) The complaint challenges a provision or provisions of an NCD. 
(See Sec. 426.405.)
    (6) The contractor notifies the ALJ that they have retired the LCD. 
(See Sec. 426.420.)
    (7) The aggrieved party withdraws the complaint. (See 
Sec. 426.423.)
    (8) The aggrieved party is deceased.
    (9) Nothing in the preceding list of circumstances leading to 
automatic dismissal shall be construed as having any force and effect 
concerning the legal rights of representatives of a deceased 
beneficiary to properly pursue settlement of a claim.
    (c) The ALJ may, at the request of any party, or on his or her own 
motion, dismiss a complaint if an ALJ has already issued an 
administrative decision on the LCD or provisions of an LCD and the 
aggrieved party has not presented any new clinical or scientific 
evidence that supports the complaint.


Sec. 426.445  Witness fees.

    (a) A witness testifying at a hearing before an ALJ receives the 
same fees and mileage as witnesses in Federal district courts of the 
United States. If the witness is an expert, he or she will be entitled 
to an expert witness fee. Witness fees will be paid by the party 
seeking to present the witness.
    (b) If an ALJ requests expert testimony, the OHA is responsible for 
paying all applicable fees and mileage.


Sec. 426.446  Record of hearing.

    The ALJ must ensure that all hearings are open to the public and 
must be mechanically or stenographically reported. All evidence upon 
which the ALJ relies for decision must be contained in the record, 
either directly or by appropriate reference. All medical reports, 
exhibits, and any other pertinent document or record, either in whole 
or in material part, introduced as evidence, must be marked for 
identification and incorporated into the record.


Sec. 426.447  Issuance and notification of an ALJ's administrative 
decision.

    An ALJ must issue to all parties to the LCD review, within 90 days 
of closing the LCD review record to the taking of evidence, one of the 
following:
    (a) A written administrative decision, including a description of 
appeal rights.

[[Page 54555]]

    (b) A written notification stating that an administrative decision 
is pending, and an approximate date of issuance for the administrative 
decision.


Sec. 426.450  Mandatory provisions of an ALJ's administrative decision.

    (a) Finding. An ALJ's administrative decision must include one of 
the following:
    (1) A determination that the provision of the LCD is valid under 
the reasonableness standard.
    (2) A determination that the provision of the LCD is not valid 
under the reasonableness standard.
    (3) A statement dismissing the complaint regarding the LCD and a 
rationale for the dismissal.
    (b) Other information. An ALJ's administrative decision must 
include all of the following:
    (1) The date of issuance.
    (2) The docket number of the LCD review.
    (3) The names of the parties to the LCD review.
    (4) A statement as to whether the aggrieved party has filed a claim 
for the service(s) named in the complaint, the date(s)-of-service, and 
the disposition, if known.
    (5) A rationale for the basis of the ALJ's administrative decision, 
including the following:
    (i) Findings of fact.
    (ii) Interpretations of law.
    (iii) Applications of fact to law.
    (6) A summary of the evidence reviewed.
    (7) A statement regarding appeal rights.
    (8) The signature of the ALJ.


Sec. 426.455  Prohibited provisions of an ALJ's administrative 
decision.

    An ALJ's administrative decision must not do any of the following:
    (a) Order CMS or its contractors to modify (including adding to or 
deleting from) a provision or provisions of an LCD.
    (b) Order CMS or its contractors to pay a specific claim.
    (c) Establish a time limit for the establishment of a new or 
revised LCD.
    (d) Review, evaluate, or address an LCD other than the LCD under 
review.
    (e) Include a requirement for CMS or its contractors that specifies 
payment, coding, or systems changes for an LCD, or deadlines for 
implementing these types of changes.
    (f) Order or address how a contractor(s) should implement an LCD.


Sec. 426.460  Effect of an ALJ's administrative decision.

    (a) Valid under the reasonableness standard. If the ALJ finds that 
the provision or provisions of the LCD named in the complaint is (are) 
valid under the reasonableness standard, the aggrieved party or parties 
may appeal that (those) part(s) of the administrative decision to the 
Board under Sec. 426.465.
    (b) Not valid under the reasonableness standard. If the ALJ finds 
that the provision or provisions of the LCD named in the complaint is 
(are) invalid under the reasonableness standard, and no appeal is filed 
by the contractor or CMS under Sec. 426.465(b) then CMS will instruct 
its contractor, the M+C plan, or other Medicare managed care plan to 
provide the following relief.
    (1) Individual claim relief when a claim is pending or has been 
previously adjudicated. If an aggrieved party's claim/appeal(s) had 
previously been denied, the contractor, an M+C plan or another Medicare 
managed care plan must reopen the aggrieved party's claim and 
adjudicate the claim without using the provision(s) of the LCD that the 
ALJ found invalid.
    (2) Individual claim relief when no claim is pending. If a revised 
LCD is issued, the contractor, the M+C plan, and any other Medicare 
managed care plan within contractor's jurisdiction will use the revised 
LCD in reviewing claim/appeal submissions or request for services for 
items delivered or services performed on or after the effective date.
    (3) Coverage determination relief. If no appeal is filed by the 
contractor of CMS under Sec. 426.425(b), within 30 days of the issuance 
of the ALJ's administrative decision, the contractor or CMS must send a 
letter to the ALJ and the aggrieved party or parties named in the 
complaint announcing the intent to do one of the following:
    (i) Retire the LCD in its entirety, or retire the provision or 
provisions of the LCD that the ALJ's administrative decision stated was 
(were) not valid under the reasonableness standard.
    (ii) Conduct a reconsideration using the information collected 
during the LCD review, as well as any other applicable information, and 
do one of the following:
    (A) Supplement the LCD record or rationale, and reaffirm the LCD.
    (B) Revise the LCD.
    (C) Retire the LCD.
    (iii) Unless retired under paragraph (b)(3)(i), or (b)(3)(ii)(C) of 
this section, the contractor may continue to use the LCD in 
adjudicating claims for individuals who did not challenge the LCD while 
a reconsideration is pending.


Sec. 426.462  Notice of an ALJ's administrative decision.

    After the ALJ has made a decision regarding an LCD complaint, the 
ALJ sends a written notice of the administrative decision to each 
party. The notice must--
    (a) Contain a finding with respect to the LCD complaint, and
    (b) Inform each party to the determination of his or her rights to 
seek further review if he or she is dissatisfied with the 
determination, and the time limit under which an appeal must be 
requested.


Sec. 426.465  Appealing part or all of an ALJ's administrative 
decision.

    (a) Circumstance under which an aggrieved party may appeal part or 
all of an ALJ's administrative decision. An aggrieved party (including 
one or more aggrieved parties named in a joint complaint and an 
aggrieved party who is part of a consolidated LCD review) may appeal to 
the Board any part of an ALJ's administrative decision that does the 
following:
    (1) States that a provision of an LCD is valid under the 
reasonableness standard.
    (2) Dismisses a complaint regarding an LCD (except as prohibited in 
paragraph (b) of this section).
    (b) Circumstance under which a contractor or CMS may appeal part or 
all of an ALJ's administrative decision. A contractor or CMS may appeal 
to the Board any part of an ALJ's administrative decision that states 
that a provision (or provisions) of an LCD is (are) unreasonable.
    (c) Stay of an implementation pending appeal.
    (1) If an ALJ's administrative decision finds a provision or 
provisions of an LCD unreasonable, an appeal by a contractor or CMS 
stays implementation of the ALJ's administrative decision until a final 
decision is issued by the Board.
    (2) The appeal request must be submitted to the Board in accordance 
with paragraph (e) of this section.
    (d) Circumstance under which an ALJ's administrative decision 
cannot be appealed. An ALJ's administrative order dismissing a 
complaint is not subject to appeal in either of the following 
circumstances:
    (1) The contractor retires the LCD under review.
    (2) The aggrieved party who filed the complaint withdraws the 
complaint.
    (e) Receipt of the appeal by the Board. Unless there is good cause, 
an appeal described in paragraphs (a) or (b) of this section must be 
received by the Board within 60 calendar days of the date the

[[Page 54556]]

ALJ's administrative decision was issued. If the 60th calendar day 
falls on a Saturday, Sunday, or Federal holiday, the Board must receive 
the appeal by the next business day.
    (f) Filing an appeal. (1) To file an appeal described in paragraph 
(a) of this section, an aggrieved party, a contractor, or CMS must send 
the following to the Board at: The Department of Health and Human 
Services, Department Appeals Board, Room 637D, Humphrey Building, 
Attention: NCD Complaint, 200 Independence Avenue, SW., Washington, DC 
20201:
    (i) The full names and addresses of the parties and participants 
named in the ALJ's administrative decision, including the name of the 
LCD.
    (ii) The date of issuance of the ALJ's administrative decision.
    (iii) The docket number that appears on the ALJ's administrative 
decision.
    (iv) A statement identifying the part(s) of the ALJ's 
administrative decision that are being appealed.
    (2) If an appeal described in paragraph (a) of this section is not 
received by the Board by the date described in paragraph (c) of this 
section, it must include a rationale stating why the late appeal should 
be accepted by the Board.
    (3) An appeal described in paragraph (a) of this section may 
include a statement explaining why the ALJ's decision should be 
reversed.


Sec. 426.467  Board's LCD review record.

    (a) Elements of the Board's LCD review record. Except as provided 
in paragraph (b) of this section, the Board's LCD review record 
consists of any document or material that the Board compiled or 
considered during an LCD review, including, but not limited to, the 
following:
    (1) The LCD complaint.
    (2) The LCD and LCD record.
    (3) The supplemental LCD record, if applicable.
    (4) The Board's administrative decision.
    (5) Transcripts of record.
    (6) Any other relevant evidence gathered under Sec. 426.440.
    (b) Documents excluded from the contractor/CMS' LCD record. The LCD 
record does not include material that is privileged or otherwise 
prohibited from release by Federal law.


Sec. 426.468  Decision to not appeal an ALJ's administrative decision.

    (a) Failure to timely appeal without good cause waives the right to 
challenge any part(s) of the ALJ's administrative decision under 
Sec. 426.665.
    (b) Unless the Board finds good cause for late filing, an untimely 
appeal will be dismissed.
    (c) If a party does not submit a timely appeal to any part(s) of 
the ALJ's administrative decision on an LCD review to the Board, as 
provided in this subpart, then the ALJ's administrative decision is 
final and not subject to any further review.


Sec. 426.470  Board's role in docketing and evaluating the 
acceptability of appeals of ALJ administrative decisions.

    (a) Docketing the appeal. The Board does the following upon 
receiving an appeal of part or all of an ALJ's administrative decision:
    (1) Dockets the appeal either separately or with similar appeals 
(see paragraph (e) of this section).
    (2) Assigns a docket number.
    (b) Evaluating the acceptability of the appeal. The Board 
determines if the appeal is acceptable by confirming that the appeal 
meets all of the criteria in Sec. 426.465.
    (c) Unacceptable appeal. If the Board determines that an appeal is 
unacceptable, the Board must issue an administrative decision 
dismissing the appeal.
    (d) Acceptable appeal. If the Board determines that an appeal is 
acceptable, the Board does the following:
    (1) Sends a letter to the appellant to acknowledge that the appeal 
is acceptable, and informing them of the docket number.
    (2) Forwards a copy of the appeal and the letter described in 
paragraph (d)(1) of this section to all parties involved in the appeal.
    (3) Requests that the ALJ send a copy of the LCD review record to 
the Board and all parties involved in the appeal.


Sec. 426.472  ALJ's role in making the LCD review record available.

    Upon a request from the Board, the ALJ must provide to the Board, 
and all parties to the review of the ALJ's administrative decision, a 
copy of the ALJ's LCD review record (as described in Sec. 426.474).


Sec. 426.474  ALJ's LCD review record.

    (a) Elements of the ALJ's LCD review record. Except as provided in 
paragraph (b) of this section, the ALJ's LCD review record consists of 
any document or material that the ALJ compiled or considered during the 
LCD review, including, but not limited to, the following:
    (1) The LCD complaint.
    (2) The LCD and LCD record.
    (3) The supplemental LCD record, if applicable.
    (4) The ALJ's administrative decision.
    (5) Transcripts of record.
    (6) Any other relevant evidence gathered under Sec. 426.440.
    (b) Documents excluded from the contractor's LCD record. The LCD 
record does not include material that is privileged or otherwise 
prohibited from release by Federal law.


Sec. 426.476  Board review of an ALJ's administrative decision.

    (a) Mandatory steps. If the Board determines that an appeal meets 
the requirements of Sec. 426.465, the Board must do the following:
    (1) Allow the aggrieved party, the contractor or CMS to submit a 
statement to the Board and the appellant in response to the appeal.
    (2) Review the entire LCD review record, or the portion of the LCD 
review record at issue.
    (3) Issue an administrative decision, as described in Sec. 426.482, 
based on one, or both, of the following standards:
    (i) Disputed issue of fact. If the appeal of the ALJ's 
administrative decision is based on a disputed issue of fact, the Board 
determines whether the ALJ's administrative decision is supported by 
substantial evidence on the whole LCD review record.
    (ii) Disputed issue of law. If the appeal of the ALJ's 
administrative decision is based on a disputed issue of law, the Board 
determines whether the ALJ's administrative decision is erroneous.
    (b) Prohibited steps. The Board must not do any of the following:
    (1) Consider any issue not raised in the parties' briefs.
    (2) Consider any evidence that is not part of the LCD review 
record.
    (c) Authority for Board in reviewing ALJ administrative decisions. 
In determining whether an ALJ's administrative decision should be 
upheld or overturned, the Board must follow the applicable provisions 
of the following:
    (1) The Social Security Act.
    (2) CMS regulations.
    (3) CMS rulings.
    (4) NCDs.
    (d) Dismissal of ALJ's administrative decision. The Board must 
dismiss the appeal of an ALJ's administrative decision if the 
contractor notifies the Board that it has retired the LCD.


Sec. 426.478  Retiring an LCD during the Board's review of an ALJ's 
administrative decision.

    A contractor may retire an LCD during the Board's review of an 
ALJ's administrative decision. If an LCD is retired, the aggrieved 
party is entitled to individual claim relief provided at 
Sec. 426.488(b).

[[Page 54557]]

Sec. 426.480  Withdrawing an appeal of an ALJ's administrative 
decision.

    (a) Withdrawal of an appeal of an ALJ's administrative decision. A 
party who filed an appeal of an ALJ's administrative decision may 
withdraw the appeal before the Board issues an administrative decision 
regarding the ALJ's administrative decision.
    (b) Process withdrawing an appeal of an ALJ's administrative 
decision. To withdraw an appeal of an ALJ's administrative decision, 
the party who filed the appeal must send a written notice announcing 
the intent to withdraw to the Board (see Sec. 426.465), and any other 
party.
    (c) Actions the Board must take upon receiving a notice announcing 
the intent to withdraw an appeal of an ALJ's administrative decision--
(1) Appeals involving one aggrieved party, or initiated by CMS or a 
contractor. If the Board receives a notice announcing the intent to 
withdraw an appeal of an ALJ's administrative decision before the date 
the Board has issued its administrative decision, the Board must issue 
an administrative decision dismissing the appeal under Sec. 426.484.
    (2) Appeals involving joint complaints. If the Board receives a 
notice announcing the intent to withdraw an appeal from an aggrieved 
party who is named in a joint appeal before the date the Board issued 
its administrative decision, the Board must issue an administrative 
decision dismissing only that aggrieved party from the appeal under 
Sec. 426.482. The Board must continue its review of the ALJ's 
administrative decision for the remaining aggrieved party or parties 
who have not withdrawn their appeal.


Sec. 426.482  Issuance and notification of a Board administrative 
decision.

    The Board must issue a written administrative decision, including a 
description of appeal rights, to all parties to the review of the ALJ 
administrative decision.


Sec. 426.484  Mandatory provisions of a Board administrative decision.

    (a) Finding. A Board administrative decision must include at least 
one of the following:
    (1) A statement upholding the part(s) of the ALJ administrative 
decision named in the appeal.
    (2) A statement reversing the part(s) of the ALJ administrative 
decision named in the appeal.
    (3) A statement dismissing the appeal of an ALJ administrative 
decision and a rationale for the dismissal.
    (b) Other information. A Board administrative decision must include 
all of the following:
    (1) The date of issuance.
    (2) The docket number of the review of the ALJ administrative 
decision.
    (3) The names of the parties to the review of the ALJ 
administrative decision.
    (4) A summary of the ALJ's administrative decision.
    (5) A rationale for the basis of the Board's administrative 
decision including the following:
    (i) Findings of fact.
    (ii) Interpretations of law.
    (iii) Application of fact to law.
    (6) The signature of a Board member.


Sec. 426.486  Prohibited provisions of a Board administrative decision.

    A Board administrative decision must not do any of the following:
    (a) Order CMS or its contractors to take specific actions in 
modifying (including adding to or deleting from) a provision or 
provisions of an LCD.
    (b) Order CMS or its contractors to pay a specific claim.
    (c) Establish a time limit for the establishment of a new or 
revised LCD.
    (d) Review or evaluate an LCD other than the LCD named in the ALJ's 
administrative decision.
    (e) Include a requirement for CMS or its contractors that specifies 
payment, coding, or system changes for an LCD or deadlines for 
implementing these changes.
    (f) Order CMS or its contractors to implement an LCD in a 
particular manner.


Sec. 426.488  Effect of a Board administrative decision.

    (a) The Board's administrative decision upholds an ALJ 
determination that an LCD is valid or reverses an ALJ determination 
that an LCD is invalid. If the Board's administrative decision upholds 
the ALJ determination that an LCD is valid under the reasonableness 
standard or reverses an ALJ determination that than LCD is invalid, the 
contractor or CMS is not required to take any action.
    (b) The Board's administrative decision upholds an ALJ 
determination that the LCD is invalid. If the Board's administrative 
decision upholds an ALJ determination that the LCD is invalid, CMS will 
instruct its contractor, the M+C plan, or other Medicare managed care 
plan to provide individual claim relief.
    (1) Individual claim relief when a claim is pending or has been 
previously adjudicated. If an aggrieved party's claim/appeal(s) had 
previously been denied, the contractor, an M+C plan, or another 
Medicare managed care plan must reopen the aggrieved party's claim and 
adjudicate the claim without using the provision(s) of the LCD that the 
ALJ found invalid.
    (2) Individual claim relief when no claim is pending. If a revised 
LCD is issued, the contractor, the M+C plan, and any other Medicare 
managed care plan within contractor's jurisdiction will use the revised 
LCD in reviewing claim or appeal submissions or request for services 
for items delivered or services performed on or after the effective 
date.
    (3) Coverage determination relief. Within 30 days of the issuance 
of the Board's administrative decision, the contractor or CMS must send 
a letter to the Board and the aggrieved party or parties named in the 
complaint announcing the intent to do one of the following:
    (i) Retire the LCD in its entirety, or retire the provision or 
provisions of the LCD found to be invalid under the reasonableness 
standard.
    (ii) Conduct a reconsideration using the information collected 
during the LCD review, as well as any other applicable information, and 
do one of the following:
    (A) Supplement the LCD record or rationale, and reaffirm the LCD.
    (B) Revise the LCD.
    (C) Retire the LCD.
    (iii) The contractor may continue to use the LCD in adjudicating 
claims for individuals who did not challenge the LCD while a 
reconsideration is pending.
    (c) The Board's administrative decision reverses a dismissal. If 
the Board's administrative decision reverses an ALJ's administrative 
decision dismissing a complaint, the LCD review is remanded to the ALJ 
and the LCD review continues.


Sec. 426.489  Board remand authority.

    (a) When the Board may remand a case. The Board may remand a case 
to an ALJ, if the ALJ's administrative decision--
    (1) Does not comply with Sec. 426.340, Sec. 426.405, Sec. 426.450, 
Sec. 426.455, or Sec. 426.474; or,
    (2) Does not include the following:
    (i) Findings of fact.
    (ii) Interpretations of law.
    (iii) Applications of fact to law.
    (iv) Summary of the evidence reviewed.
    (v) The signature of the ALJ.
    (b) When the Board may not remand a case. The Board may not remand 
a case to an ALJ to review new or additional evidence submitted during 
the Board review of an LCD complaint.
    (c) Notice when case is remanded to the OHA. If the Board remands a 
case to the OHA, the Board will--

[[Page 54558]]

    (1) Notify each aggrieved party at his or her last known address, 
the contractor and CMS of the Board's remand decision; and
    (2) Explain why the case is being remanded and the specific actions 
ordered by the Board.
    (d) Action by an ALJ on remand. An ALJ will take any action that is 
ordered by the Board and may take any additional action that is not 
inconsistent with the Board's remand order.


Sec. 426.490  Board administrative decision.

    A decision by the Board constitutes a final agency action and is 
subject to judicial review. Neither the contractor nor CMS may appeal a 
Board administrative decision.

Subpart E--Review of an NCD


Sec. 426.500  Procedure for filing an acceptable complaint to a 
provision or provisions of an NCD.

    (a) The complaint. An aggrieved party may initiate a review of an 
NCD by filing a written complaint with the Department of Health and 
Human Services, Departmental Appeals Board, Room 637D, Humphrey 
Building, Attention: NCD Complaint, 200 Independence Avenue, SW., 
Washington, DC 20201.
    (b) Timeliness of a complaint. The Board must receive a complaint 
within 6 months of the written statement described in paragraph 
(c)(1)(vi) of this section.
    (c) Components of a valid complaint. A complaint must contain the 
following information:
    (1) Beneficiary-identifying information:
    (i) Beneficiary's name.
    (ii) Beneficiary's mailing address.
    (iii) Beneficiary's State of residence, if different from mailing 
address.
    (iv) Beneficiary's telephone number.
    (v) Beneficiary's Health Insurance Claim number.
    (vi) A copy of the treating physician's certification that, in his 
or her medical opinion, the beneficiary needs the service that is the 
subject of the NCD.
    (vii) A statement from the treating physician that Medicare 
coverage for the service needed is likely to be denied under the 
applicable NCD.
    (2) NCD-identifying information:
    (i) Title of final NCD being challenged.
    (ii) The specific provision or provisions of the NCD adversely 
affecting the aggrieved party.
    (3) Aggrieved party statement. A statement from the aggrieved party 
explaining the rationale for the allegation that the provision(s) of 
the NCD is (are) not valid under the reasonableness standard, and 
whether the aggrieved party has received the service related to the 
NCD.
    (4) Clinical or scientific evidence. Copies of clinical or 
scientific evidence that supports the complaint.
    (d) Joint complaints--(1) Conditions for a joint complaint. Two or 
more aggrieved parties may initiate the review of an NCD by filing a 
single written complaint with the Board if all of the following 
conditions are met:
    (i) Each aggrieved party named in the joint complaint has a similar 
medical condition.
    (ii) Each aggrieved party named in the joint complaint is filing 
the complaint in regard to the same provision(s) of the same NCD.
    (2) Components of a valid joint complaint. A joint complaint must 
contain the following information:
    (i) The beneficiary-identifying information described in paragraph 
(c)(1) of this section for each aggrieved party named in the joint 
complaint.
    (ii) The NCD-identifying information described in paragraph (c)(2) 
of this section.
    (iii) The documentation described in paragraphs (c)(3) and (c)(4) 
of this section.
    (3) Timeliness of a joint complaint. The Board must receive a joint 
complaint within 6 months of the date of the documentation from each 
aggrieved party's treating physician expressing the belief that payment 
for the needed service is likely to be denied under the NCD in 
question.


Sec. 426.505  Authority of the Board.

    (a) The Board conducts a fair and impartial hearing, avoids 
unnecessary delay, maintains order, and ensures that all proceedings 
are recorded.
    (b) The Board defers only to reasonable findings of fact, 
reasonable interpretations of law, and reasonable applications of fact 
to law by the Secretary.
    (c) The Board has the authority to do any of the following:
    (1) Review complaints by an aggrieved party (or aggrieved parties).
    (2) Dismiss complaints that fail to comply with Sec. 426.500.
    (3) Set and change the date, time, and place of a hearing upon 
reasonable notice to the parties to the review.
    (4) Continue or recess a hearing for a reasonable period of time.
    (5) Hold conferences to identify or simplify the issues, or to 
consider other matters that may aid in the expeditious disposition of 
the proceeding.
    (6) Consult with scientific and clinical experts on its own motion, 
concerning clinical or scientific evidence.
    (7) Set schedules for submission of exhibits and written reports of 
experts.
    (8) Administer oaths and affirmations.
    (9) Examine witnesses.
    (10) Issue subpoenas requiring the attendance of witnesses at 
hearings as permitted by this part.
    (11) Issue subpoenas requiring the production of existing documents 
before, and relating to, the hearing as permitted by this part.
    (12) Rule on motions and other procedural matters.
    (13) Regulate the scope and timing of documentary discovery as 
permitted by this part.
    (14) Regulate the course of a hearing and the conduct of 
representatives, parties, and witnesses.
    (15) Receive, rule on, exclude, or limit evidence, in accordance 
with Sec. 426.340.
    (16) Take official notice of facts, upon motion of a party.
    (17) Decide cases, upon the motion of a party, by summary judgment 
when there is no disputed issue of material fact.
    (18) Conduct any conference, argument, or hearing in person or, 
upon agreement of the parties, by telephone, picture-tel, or any other 
means.
    (19) Issue administrative decisions, including remand orders.
    (20) Exclude a party to an NCD review (or a party's representative) 
for failure to comply with a Board order or procedural request without 
good cause.
    (d) The Board does not have authority to do any of the following 
under this part:
    (1) Conduct an NCD review or conduct NCD hearings, except as 
provided by Sec. 426.465.
    (2) Conduct an NCD review or conduct NCD hearings on its own motion 
or on the motion of a nonaggrieved party.
    (3) Receive or accept any new evidence without following 
Sec. 426.340.
    (4) Review any decisions by CMS to develop a new or revised NCD.
    (5) Conduct a review of any draft NCDs or coverage decision 
memoranda.
    (6) Conduct a review of the merits of an invalid NCD complaint.
    (7) Conduct an NCD review of any policy that is not an NCD, as 
defined in Sec. 400.202 of this chapter.
    (8) Compel mediation or settlement negotiations by aggrieved 
parties.
    (9) Deny a request for withdrawal of a complaint by an aggrieved 
party.
    (10) Compel CMS to conduct studies, surveys, or develop new 
information to support an NCD record.
    (11) Deny CMS the right to repeal an NCD.
    (12) Subject to the timely filing requirements, deny an aggrieved 
party,

[[Page 54559]]

CMS, or its contractor the right to appeal an ALJ administrative 
decision.
    (13) Deny CMS the right to conduct an NCD reconsideration review 
when any party submits new evidence.
    (14) Make a determination under Sec. 426.541 before a CMS 
reconsideration review of new evidence as described in Sec. 426.340.
    (15) Find invalid applicable Federal statutes, regulations, or 
ruling (other than a ruling that meets the definition of an NCD in 
Sec. 400.202 of this chapter).
    (16) Enter an administrative decision defining the specific terms 
of a subsequent NCD.


Sec. 426.506  Ex parte contacts

    No party or person (except employees of the Board's office) will 
communicate in any way with the Board on any substantive matter at 
issue in a case, unless on notice and opportunity for all parties to 
participate. This provision does not prohibit a person or party from 
inquiring about the status of a case or asking routine questions 
concerning administrative functions or procedures.


Sec. 426.510  Board's role in docketing and evaluating the 
acceptability of NCD complaints.

    (a) Docketing the complaint. The Board must docket a complaint when 
it receives a complaint regarding an NCD.
    (b) Evaluating the acceptability of the complaint. The Board 
determines if the complaint is acceptable by confirming all of the 
following:
    (1) The complaint is being submitted by an aggrieved party or, in 
the case of a joint complaint, that each individual named in the joint 
complaint is an aggrieved party. (In determining if a complaint is 
acceptable, the Board will assume that the facts alleged by the 
treating physician's statement regarding the aggrieved party's (or 
parties') clinical condition are true.)
    (2) The complaint meets the requirements for a valid complaint in 
Sec. 426.500 and is not one of the documents in Sec. 426.320(b).
    (c) Unacceptable complaint.
    (1) If the Board determines that the complaint is unacceptable, the 
Board must provide the aggrieved party (or parties) one opportunity to 
amend the unacceptable complaint.
    (2) If the aggrieved party (or parties) fail(s) to submit an 
acceptable amended complaint within a reasonable timeframe as 
determined by the Board, the Board must issue an administrative 
decision dismissing the unacceptable complaint.
    (d) Acceptable complaint. If the Board determines that the 
complaint (or amended complaint) is acceptable, the Board does the 
following:
    (1) Sends a letter to the aggrieved party (or parties) 
acknowledging the complaint and informing the aggrieved party (or 
parties) of the docket number.
    (2) Forwards a copy of the complaint and the letter described in 
paragraph (d)(1) of this section to CMS.
    (3) Requests that CMS send a copy of the NCD record to the Board 
and all parties to the NCD review.
    (e) Consolidation of complaints regarding an NCD--(1) Criteria for 
consolidation. If two or more aggrieved parties submit separate 
acceptable complaints to the same provision(s) of the same NCD, the 
Board may, upon its own motion or by motion of any party to the NCD 
review, consolidate the complaints and conduct a consolidated NCD 
review if all of the following criteria are met:
    (i) The complaints are in regard to the same provision(s) of the 
same NCD.
    (ii) The complaints contain common questions of law, common 
questions of fact, or both.
    (2) Decision to consolidate complaints. If the Board decides to 
consolidate complaints, the Board does the following:
    (i) Provides notification that the NCD review will be consolidated 
and informing all parties of the new docket number.
    (ii) Makes a single record of the proceeding.
    (iii) Considers the relevant evidence introduced in each NCD 
challenge as introduced in the consolidated review.
    (3) Decision not to consolidate complaints. If the Board decides 
not to consolidate complaints, the Board conducts separate NCD reviews 
for each complaint.


Sec. 426.515  CMS's role in making the NCD record available.

    CMS will provide a copy of the NCD record (as described in 
Sec. 426.518) to the Board and all parties to the NCD review.


Sec. 426.518  NCD record.

    (a) Elements of the NCD record. Except as provided in paragraph (b) 
of this section, the NCD record consists of any document or material 
that CMS considered during the development of the NCD, including, but 
not limited to, the following:
    (1) The NCD being challenged.
    (2) Any relevant medical evidence considered on or before the date 
the NCD was issued, including, but not limited to, the following:
    (i) Scientific articles.
    (ii) Technology assessments.
    (iii) Clinical guidelines.
    (iv) Records from the Food and Drug Administration regarding safety 
and efficacy of a drug or device except where prohibited by Federal 
law.
    (v) Statements from clinical experts, medical textbooks, claims 
data, or other indication of medical standard of practice.
    (3) Public comments received (comments received during the notice 
and comment period).
    (b) Documents excluded from the NCD record. The NCD record does not 
include the following:
    (1) Material that is privileged or otherwise prohibited from 
release by Federal law.
    (2) Any new evidence.
    (3) Proprietary data.


(1) Sec. 426.520  Repealing an NCD under review.

    CMS may repeal an NCD under review before the date the Board issues 
an administrative decision regarding that NCD. Repealing an NCD under 
review has the same effect as an administrative decision under 
Sec. 426.560(b).


Sec. 426.523  Withdrawing a complaint regarding an NCD under review.

    (a) Circumstance under which an aggrieved party withdraws a 
complaint regarding an NCD. An aggrieved party who filed a complaint 
regarding an NCD may withdraw the complaint before the Board issues an 
administrative decision regarding that NCD. The aggrieved party may not 
file another complaint to the same coverage determination for 6 months.
    (b) Process for an aggrieved party withdrawing a complaint 
regarding an NCD. To withdraw a complaint regarding an NCD, the 
aggrieved party who filed the complaint must send a written notice 
announcing the intent to withdraw to the Board (see Sec. 426.500) and 
CMS.
    (c) Actions the Board must take upon receiving a notice announcing 
the intent to withdraw a complaint regarding an NCD--(1) NCD reviews 
involving one aggrieved party. If the Board receives a notice 
announcing the intent to withdraw a complaint regarding an NCD before 
the date the Board issued an administrative decision regarding that 
NCD, the Board issues an administrative decision dismissing the 
complaint under Sec. 426.544 and informing the aggrieved party that he 
or she may not file another complaint to the same coverage 
determination for 6 months.
    (2) NCD reviews involving joint complaints. If the Board receives a 
notice from an aggrieved party who is named in a joint complaint 
announcing the intent to withdraw a complaint regarding an NCD before 
the date the

[[Page 54560]]

Board issued an administrative decision regarding that NCD, the Board 
issues an administrative decision dismissing only that aggrieved party 
from the complaint under Sec. 426.544. The Board continues the NCD 
review if there is one or more aggrieved party who does not withdraw 
from the joint complaint.
    (3) Consolidated NCD reviews. If the Board receives a notice from 
an aggrieved party who is part of a consolidated NCD review announcing 
the intent to withdraw a complaint regarding an NCD before the date the 
Board issued an administrative decision regarding that NCD, the Board 
removes that aggrieved party from the consolidated NCD review and 
issues an administrative decision dismissing that aggrieved party's 
complaint under Sec. 426.544. The Board continues the NCD review if 
there is one or more aggrieved party who does not withdraw from the 
joint complaint.


Sec. 426.525  NCD review.

    (a) Opportunity for the aggrieved party to state that the NCD 
record is not complete, not adequate to support the validity of the 
NCD, or both. Upon receipt of the NCD record, the aggrieved party who 
submitted the complaint may file a motion alleging that the NCD record 
is not complete, not adequate to support the validity of the NCD, or 
both. This motion must be submitted to the Board and CMS within 30 days 
(or within additional time as allowed by the Board) of the date the 
aggrieved party receives the NCD record.
    (1) If an aggrieved party does not file a motion alleging that the 
NCD record is incomplete or lacks adequate information to support the 
validity of the NCD, then the Board makes a determination whether the 
NCD record is complete and adequate, as described in Sec. 426.530(a).
    (2) If an aggrieved party files a motion alleging that the NCD 
record is not complete, not adequate to support the validity of the 
NCD, or both, based on clinical and scientific evidence contained in 
the NCD record, then the Board makes a determination whether the NCD 
record is complete and adequate, as described in Sec. 426.530(b).
    (3) If an aggrieved party files a motion alleging that the NCD 
record is not complete, not adequate to support the validity of the 
NCD, or both, based on new evidence, then the Board stays the 
proceeding upon request by CMS as described in Sec. 426.340.
    (b) The aggrieved party may file a petition with the Board 
requesting additional time to review the NCD record. This petition must 
be submitted to the Board within 30 days (or within additional time as 
allowed by the Board). This petition shall be in writing, will state 
the reason(s) why the request for extension is being made, and the 
amount additional of time needed to review the NCD record. The Board 
may extend the time for reviewing the NCD case file by an aggrieved 
party for a reasonable period of time.


Sec. 426.529  Review following supplemental record.

    (a) Opportunity for the aggrieved party to review the supplemental 
NCD record. Upon receipt of the supplemental NCD record following a 
reconsideration under Sec. 426.340, the aggrieved party who submitted 
the complaint may file a motion alleging that the NCD record is not 
complete, not adequate to support the validity of the NCD, or both. 
This motion must be submitted to the Board and CMS within 30 days (or 
within additional time as allowed by the Board) of the date the 
aggrieved party receives the supplemental NCD record.
    (1) If an aggrieved party does not file a motion alleging the 
supplemental NCD record is incomplete or lacks adequate information to 
support the validity of the NCD, then the Board makes a determination 
whether the NCD record is complete and adequate, as described in 
Sec. 426.530(a).
    (2) If an aggrieved party files a motion alleging that the NCD 
record is not complete, not adequate to support the validity of the 
NCD, or both, based on clinical and scientific evidence contained in 
the NCD record, then the Board makes a determination whether the NCD 
record is complete and adequate, as described in Sec. 426.530(b).
    (3) If an aggrieved party files a motion alleging that the 
supplemental NCD record is not complete, not adequate to support the 
validity of the NCD, or both, based on new evidence, then the Board 
stays the proceeding upon request by CMS as described in Sec. 426.340.
    (b) Request for additional time to review the CMS's supplemental 
NCD record by the aggrieved party. The aggrieved party may file a 
petition with the Board requesting additional time to review CMS's 
supplemental NCD record. This petition must be submitted to the Board 
within 30 days (or within additional time as allowed by the Board). 
This petition shall be in writing, shall state the reason(s) why the 
request for extension is being made, and the amount of time needed to 
review the supplemental NCD record. The Board may extend the time for 
reviewing the supplemental NCD record for a reasonable period of time.


Sec. 426.530  Board's role in determining whether the NCD record is 
complete and adequate to support the validity of the NCD.

    (a) If the aggrieved party does not file a motion described in 
Sec. 426.525(a) or Sec. 426.529(a), the Board reviews CMS's NCD record 
and applies the reasonableness standard, as described in Sec. 426.531.
    (b) If the aggrieved party files a motion described in 
Sec. 426.525(a) or Sec. 426.529(a), the Board must do the following:
    (1) Allow the CMS to submit a statement to the Board and the 
aggrieved party responding to the motion described in paragraph (a) of 
this section. This statement must be submitted within 30 days (or 
within additional time as allowed by the Board) of the date CMS 
receives the statement from the aggrieved party described in paragraph 
(a) of this section.
    (2) Review the contents of the NCD record, as described in 
Sec. 426.518.
    (3) Hold conferences, if necessary, which may be conducted (at the 
Board's discretion) either in person, or, by mutual agreement of the 
parties, by telephone, picture-tel, or any other means agreed upon by 
all parties involved.
    (4) Determine if the NCD record is complete and adequate to support 
the validity of the NCD.
    (c) Board's determination of the completeness of the NCD record, 
and the determination of CMS's NCD record's adequacy to support the 
validity of the NCD:
    (1) Board determination that the NCD record is complete and 
adequate to support the validity of the NCD. If the Board determines 
that the NCD record is complete and adequate to support the validity of 
the NCD, the Board does the following:
    (i) Sends a letter to the aggrieved party, the contractor, and CMS 
stating that the Board finds the NCD record to be complete and adequate 
to support the validity of the NCD.
    (ii) Reviews the provision(s) of the NCD named in the complaint 
based on the reasonableness standard as described in Sec. 426.531.
    (2) Board determination that the CMS's NCD record is not complete, 
not adequate to support the validity of the NCD, or both. If the Board 
determines that CMS's NCD record is not complete, not adequate to 
support the validity of the NCD, or both, the Board does the following:
    (i) Sends a letter to the aggrieved party and CMS stating that the 
NCD record is not complete, not adequate to support the validity of the 
NCD, or both.

[[Page 54561]]

    (ii) Allows discovery as described in Sec. 426.532.
    (iii) Upon admission of new evidence, follows the process for 
review of new evidence as described in Sec. 426.340.
    (iv) Reviews the provision(s) of the NCD named in the complaint to 
apply the reasonableness standard as described in Sec. 426.531.


Sec. 426.531  Board's review of the NCD to apply the reasonableness 
standard.

    (a) Required steps. The Board must do the following to review the 
provision(s) named in the aggrieved party's complaint based on the 
reasonableness standard:
    (1) Confine the NCD review to the provision(s) of the NCD raised in 
the aggrieved party's complaint filed with the Board, and to clinical 
or scientific evidence that is contained in the NCD record (or 
supplemental record).
    (2) Close the NCD review record to the taking of evidence.
    (3) Issue an administrative decision as described in Sec. 426.547.
    (b) Optional steps. The Board may do the following to apply the 
reasonableness standard to the provision(s) named in the aggrieved 
party's complaint:
    (1) Conduct a hearing, and allow subpoenas as described in 
Sec. 426.535 and the taking of evidence as described in Sec. 426.540.
    (2) At a hearing, consult with appropriate scientific or clinical 
experts concerning clinical or scientific evidence.
    (3) Consider any previous Board administrative decision made under 
Sec. 426.547 regarding the same provision(s) of the NCD under review.
    (c) Authority for the Board in NCD reviews when applying the 
reasonableness standard. In applying the reasonableness standard to a 
provision (or provisions) of an NCD, the Board must follow the 
applicable provisions of the following:
    (1) The Social Security Act.
    (2) CMS regulations.
    (3) CMS rulings.
    (4) NCDs.


Sec. 426.532  Discovery.

    (a) General rules. If the Board orders discovery, the Board does 
the following:
    (1) Establishes a reasonable time frame for discovery.
    (2) Ensures that a party to the NCD review who receives a discovery 
request has certain rights, which include, but are not limited to, the 
following:
    (i) The right to select and use an attorney or other representative 
during the discovery process.
    (ii) The right to submit discovery responses, objections, motions, 
or other pertinent materials to the Board.
    (3) Ensures that a nonparty to the NCD review who receives a 
discovery request has the same rights in responding to a discovery 
request as any party.
    (b) Protective orders--(1) Request for a protective order. Any 
party or nonparty receiving a discovery request may file a motion for a 
protective order before the date of production of the discovery.
    (2) The Board granting of a protective order. The Board may grant a 
motion for protective order if it finds that the discovery sought--
    (i) Is irrelevant;
    (ii) Is unduly costly or burdensome;
    (iii) Will unduly delay the proceeding;
    (iv) Is privileged under Federal law; or
    (v) Is proprietary data.
    (c) Types of discovery available. A party may make a request to 
another party or nonparty for production of documents relating to a 
specific NCD.
    (d) Types of documents. For the purpose of this section, the term 
documents includes relevant information, reports, answers, records, 
accounts, papers, and other data and documentary evidence. Nothing 
contained in this section will be interpreted to require the creation 
of a document.
    (e) Types of discovery not available. Requests for admissions, 
depositions, written interrogatories, or any other forms of discovery, 
other than those permitted under paragraph (d) of this section, are not 
authorized.
    (f) Privileged documents--(1) Options for the Board. The Board may, 
in appropriate circumstances, do any of the following:
    (i) Order CMS to provide an index of any documents withheld on the 
basis of privilege and to state the basis for the privilege claim.
    (ii) Conduct an in-camera review of any documents withheld on the 
basis of privilege.
    (2) Confidentiality. If the Board orders the release of any 
document when privilege was asserted, the Board must order that all 
names or identifying information that is not relevant to the specific 
NCD must be redacted from the document.


Sec. 426.535  Subpoenas.

    (a) Purpose of a subpoena. A subpoena requires the attendance of an 
individual at a hearing and may also require the individual (whether or 
not the individual is a party) to produce evidence authorized under 
Sec. 426.540 at or before the hearing.
    (b) Filing a motion for a subpoena. A party seeking a subpoena must 
file a written motion with the Board not less than 30 days before the 
date fixed for the hearing. The motion must do all of the following:
    (1) Designate the witnesses.
    (2) Specify any evidence to be produced.
    (3) Describe the address and location with sufficient particularity 
to permit the witnesses to be found.
    (4) State the pertinent facts that the party expects to establish 
by the witnesses or documents and whether the facts could be 
established by other evidence without the use of a subpoena.
    (c) Response to a motion for a subpoena. Within 15 days after the 
written motion requesting issuance of a subpoena is served on all 
parties, any party may file an opposition to the motion or other 
response.
    (d) Extension for good cause. The Board may modify the deadlines 
specified in paragraphs (b) and (c) of this section for good cause.
    (e) Motion for a subpoena granted. If the Board grants a motion 
requesting issuance of a subpoena, the subpoena must do the following:
    (1) Be issued in the name of the Board.
    (2) Include the docket number and title of the NCD under review.
    (3) Provide notice that the subpoena is issued according to 
sections 1872 and 205(d) and (e) of the Social Security Act.
    (4) Specify the time and place at which the witness is to appear 
and any evidence the witness is to produce.
    (f) Delivery of the subpoena. The party seeking the subpoena will 
serve it by personal delivery to the individual named, or by certified 
mail return receipt requested, addressed to the individual at his or 
her last dwelling place or principal place of business.
    (g) Motion to quash a subpoena. The individual to whom the subpoena 
is directed may file with the Board a motion to quash the subpoena 
within 10 days after service.
    (h) Refusal to obey a subpoena. The exclusive remedy for contumacy 
by, or refusal to obey a subpoena duly served upon, any person is 
specified in section 205(e) of the Act (42 U.S.C. 405(e)).


Sec. 426.540  Evidence.

    (a) The Board determines the admissibility of evidence consistent 
with Sec. 426.340.
    (b) Except as provided in this part, the Board is not bound by the 
Federal Rules of Evidence. However, the Board may apply the Federal 
Rules of Evidence

[[Page 54562]]

when appropriate, for example, to exclude unreliable evidence.
    (c) The Board must exclude evidence that it determines is clearly 
irrelevant or immaterial.
    (d) Although relevant, the Board must exclude evidence if the Board 
determines it is privileged under Federal law.
    (e) Consistent with Sec. 426.340, the Board may permit the parties 
to introduce the testimony of scientific and clinical experts, rebuttal 
witnesses, and other relevant evidence, only if the testimony is 
related to evidence that was considered in the NCD. This testimony may 
be submitted in the form of a written report, accompanied by the 
curriculum vitae of the expert preparing the report.
    (f) Experts submitting reports must be available for cross-
examination at an evidentiary hearing upon request of the Board or a 
party to the proceeding, or the report will be excluded from the 
record.
    (g) All documents and other evidence offered or taken for the 
record will be open to examination by all parties, unless otherwise 
ordered by the Board for good cause shown.


Sec. 426.541  Closing discovery.

    Upon completion of discovery, the Board will notify all parties in 
writing that the discovery period is closed.


Sec. 426.544  Dismissals for cause.

    (a) The Board may, at the request of any party, or on its own 
motion, dismiss a complaint if the aggrieved party (or his or her 
representative) fails to do either of the following:
    (1) Attend or participate in a prehearing conference or hearing 
without good cause.
    (2) Comply with a lawful order of the Board.
    (b) The Board must dismiss any provision(s) of a complaint in any 
of the following circumstances:
    (1) The Board does not have the authority to rule on that provision 
under Sec. 426.505(d).
    (2) The complaint is not timely. (See Sec. 426.500.)
    (3) The complaint is not filed by an aggrieved party, or is filed 
by an individual who is unable to demonstrate that he or she is in need 
of a particular service. (See Sec. 426.500.)
    (4) The aggrieved party no longer needs the service because the 
aggrieved party has received the service before the aggrieved party 
filed the complaint with the Board, except for an individual who has a 
continuing need for a particular item or service that is subject to an 
NCD.
    (5) The complaint challenges a provision or provisions of an LCD 
except as provided in Sec. 426.476. (See Sec. 426.505.)
    (6) CMS notifies the Board that the NCD is no longer in effect. 
(See Sec. 426.520.)
    (7) The aggrieved party withdraws the complaint. (See 
Sec. 426.523.)
    (8) The aggrieved party is deceased.
    (9) Nothing in the preceding list of circumstances leading to 
automatic dismissal shall be construed as having any force and effect 
concerning the legal rights of representatives of a deceased 
beneficiary to properly pursue settlement of a claim.
    (c) The Board may, at the request of any party, or on his or her 
own motion, dismiss a complaint if the Board has already issued an 
administrative decision on the NCD or provisions of an NCD and the 
aggrieved party has not presented any new clinical or scientific 
evidence that supports the complaint.


Sec. 426.545  Witness fees.

    (a) A witness testifying at a hearing before the Board receives the 
same fees and mileage as witnesses in Federal district courts of the 
United States. If the witness is an expert, he or she will be entitled 
to an expert witness fee. Witness fees will be paid by the party 
seeking to present the witness.
    (b) If the Board requests expert testimony, the Board is 
responsible for paying all applicable fees and mileage.


Sec. 426.546  Record of hearing.

    The Board must ensure that all hearings are open to the public and 
must be mechanically or stenographically reported. All evidence upon 
which the Board relies for decision must be contained in the transcript 
of testimony, either directly or by appropriate reference. All medical 
reports, exhibits, and any other pertinent document or record, either 
in whole or in material part, introduced as evidence, must be marked 
for identification and incorporated into the record.


Sec. 426.547  Issuance, notification, and posting of a Board's 
administrative decision.

    The Board must do all of the following:
    (a) Issue to all parties to the NCD review, within 90 days of 
closing the NCD review record to the taking of evidence, one of the 
following:
    (1) A written administrative decision, including a description of 
appeal rights.
    (2) A written notification stating that an administrative decision 
is pending, and an approximate date of issuance for the administrative 
decision.
    (b) Make the administrative decision available on the Internet 
located at the Medicare Internet site of the Department of Health and 
Human Services. The posted decision will not include any information 
that would identify any individual, provider of service, or supplier.


Sec. 426.550  Mandatory provisions of the Board's administrative 
decision.

    (a) Finding. The Board's administrative decision must include one 
of the following:
    (1) A determination that the provision of the NCD is valid under 
the reasonableness standard.
    (2) A determination that the provision of the NCD is not valid 
under the reasonableness standard.
    (3) A statement dismissing the complaint regarding the NCD, and a 
rationale for the dismissal.
    (b) Other information. The Board's administrative decision must 
include all of the following:
    (1) The date of issuance.
    (2) The docket number of the NCD review.
    (3) The names of the parties to the NCD review.
    (4) A statement as to whether the aggrieved party has filed a claim 
for the service(s) named in the complaint, the date(s)-of-service, and 
the disposition, if known.
    (5) A rationale for the basis of the Board's administrative 
decision, including the following:
    (i) Findings of fact.
    (ii) Interpretations of law.
    (iii) Applications of fact to law.
    (6) A summary of the evidence reviewed.
    (7) A statement regarding the right to judicial review.
    (8) The signature of a Board member.


Sec. 426.555  Prohibited provisions of the Board's administrative 
decision.

    The Board's administrative decision must not do any of the 
following:
    (a) Order CMS to modify (including adding to or deleting from) a 
provision or provisions of an NCD.
    (b) Order CMS to pay a specific claim.
    (c) Establish a time limit for the establishment of a new or 
revised NCD.
    (d) Review, evaluate, or address an NCD other than the NCD under 
review.
    (e) Include a requirement for CMS that specifies payment, coding, 
or systems changes for an NCD, or deadlines for implementing these 
types of changes.
    (f) Order or address how CMS implements an NCD.


Sec. 426.560  Effect of the Board's administrative decision.

    (a) Valid under the reasonableness standard. If the Board finds 
that the

[[Page 54563]]

provision (or provisions) of an NCD named in the complaint is (are) 
valid under the reasonableness standard, the aggrieved party may 
challenge the final agency action in Federal court.
    (b) Not valid under the reasonableness standard. If the Board finds 
that the provision (or provisions) of an NCD named in the complaint is 
(are) invalid under the reasonableness standard, then CMS will instruct 
its contractor, M+C plan, or other Medicare managed care plan to 
provide the following relief.
    (1) Individual claim relief when a claim is pending or has been 
previously adjudicated. If an aggrieved party's claim/appeal(s) had 
previously been denied, the contractor, an M+C plan, or another 
Medicare managed care plan must reopen the aggrieved party's claim and 
adjudicate the claim without using the provision(s) of the NCD that the 
Board found invalid.
    (2) Individual claim relief when no claim is pending. If a revised 
NCD is issued, contractors, M+C plans, and other Medicare managed care 
plans must use the revised NCD in reviewing claim/appeal submissions or 
request for service for items delivered or services performed on or 
after the effective date.
    (3) Coverage determination relief. Within 30 days of the issuance 
of the Board's administrative decision, CMS must send a letter to the 
Board and the aggrieved party or parties named in the complaint 
announcing the intent to do one of the following:
    (i) Repeal the NCD in its entirety, or repeal the provision or 
provisions of the NCD that the Board's administrative decision stated 
was (were) not valid under the reasonableness standard.
    (ii) Conduct a reconsideration using the information collected 
during the NCD review, as well as any other applicable information, and 
do one of the following:
    (A) Supplement the NCD record or rationale, and issue a new NCD.
    (B) Revise the NCD.
    (C) Repeal the NCD.
    (iii) Unless repealed under paragraph (b)(3)(i) or (b)(3)(ii)(C) of 
this section, the contractor may continue to use the NCD in 
adjudicating claims for individuals who did not challenge the NCD while 
a reconsideration is pending.


Sec. 426.562  Notice of the Board's administrative decision.

    After the Board has made a decision regarding an NCD complaint, the 
Board sends a written notice of the administrative decision to each 
party. The notice must--
    (a) Contain a finding with respect to the NCD complaint; and
    (b) Inform each party to the determination of his or her rights to 
seek further review if he or she is dissatisfied with the 
determination, and the time limit under which an appeal must be 
requested.


Sec. 426.565  Board's role in making an LCD or NCD review record 
available.

    Upon a request from a Federal Court, the Board must provide to the 
Federal Court, a copy of the Board's LCD or NCD review record (as 
described in Sec. 426.567).


Sec. 426.567  Board's NCD review record.

    (a) Elements of the Board's NCD review record. Except as provided 
in paragraph (b) of this section, the Board's NCD review record 
consists of any document or material that the Board compiled or 
considered during an NCD review, including, but not limited to, the 
following:
    (1) The NCD complaint.
    (2) The NCD and NCD record.
    (3) The supplemental NCD record, if applicable.
    (4) The Board's administrative decision.
    (5) Transcripts of record.
    (6) Any other relevant evidence gathered under Sec. 426.540.
    (b) Documents excluded from the contractor/CMS' NCD record. The NCD 
record does not include material that is privileged or otherwise 
prohibited from release by Federal law.


Sec. 426.570  Board administrative decision.

    A decision by the Board constitutes a final agency action and is 
subject to judicial review. CMS may not appeal a Board administrative 
decision.

    (Catalog of Federal Domestic Assistance Program No. 93.774, 
Medicare--Supplementary Medical Insurance Program)


    Dated: January 26, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: August 16, 2002.
Tommy G. Thompson,
Secretary.
[FR Doc. 02-21530 Filed 8-21-02; 8:45 am]
BILLING CODE 4120-01-P